My Investing Notebook :: Learning from the pros; making decisions on my own. ::

ETFs are great. They allow you to buy the whole index of stocks with one purchase. I have always like them. But these days, there are new ETFs coming daily. Where should you invest? John Bogle, featured in Barron’s has some good advice, I think.

Q: Let’s say an individual has a million dollars to spend in constructing a stock and bond portfolio with ETFs. What kind of ETFs would you recommend their using?A: First off, we expect that investors should talk with their financial advisers about their particular needs. The basic strategy that we see people using is buying the broad benchmark, so perhaps the Russell 3000 Index Fund (ticker: (IWV)) and the MSCI EAFE Index Fund ( (EFA)), which gives you exposure to all the developed non-U.S. markets such as Western Europe and Japan. And depending on an individual risk tolerance and preferences and liquidity needs, we have bond funds. If you want to maintain greater liquidity, we see a lot of people who do that in our short-term Treasury fund [Lehman Short Treasury Bond Fund] ( (SHV)). But for longer-term investments we see people investing more frequently in things like the iBoxx Investment Grade Corporate Bond Fund ( (LQD)).

ReferenceWhat’s the Skinny on Skinny ETFs? – Barron’s Online