Best Funds: Vanguard Total Market Index ETF (VTI)/Guggenheim S&P 500 Equal Weight (RSP)
Finally, you’ll want some form of exposure to the “broader markets.”
If you believe the S&P 500 Index is a broad enough proxy for the market — and most people do — I recommend the Guggenheim S&P 500 Equal Weight (RSP), which merely takes the equal-weight approach to the index.
However, if you really want to go big, you might consider the Vanguard Total Market Index ETF (VTI). That way, I’ll never feel left out if some stock goes to the moon, since at least I’ll hold a few pennies worth via this ETF! All told, VTI holds more than 3,600 stocks, and has a nice balance among numerous sectors.
VTI isn’t just one of the best funds for diversification — at 0.05%, it’s also one of the cheapest.
As of this writing, Lawrence Meyers was long all of the aforementioned ETFs. He is president of PDL Broker, Inc., which brokers financing, strategic investments and distressed asset purchases between private equity firms and businesses. He also has written two books and blogs about public policy, journalistic integrity, popular culture, and world affairs. Contact him at firstname.lastname@example.org and follow his tweets @ichabodscranium.