A. This is a strategy that utilizes ETFs to build a core broad market-based index ETFs (such as US domestic stocks, international stocks, etc.), complemented by some creative use of ETFs that focus on some specific segments or niches (see 5 creative use of index and ETFs).
Using Vauguard's super low cost index funds, you can build the core of your portfolio with the following three funds (with different weights, depending on your situation).
- Vanguard Total Stock Market Index (VTSMX)
- Vanguard Total International Stock Market (VGTSX)
- Vanguard Total Bond (VBMFX)
Your average expense will be only 0.20% annually, but you will get market return, which will beat most of the actively managed funds.
For the "explore" part of your portfolio, you can focus on certain asset classes, such as certain market segments or commodities for speculative gains.