Five hundred dollars won't get you very far if you're looking for diversification on the stock market. Shares of many successful companies (such as ) are trading for about that price all on their own.

Yet, your investing dollars can stretch much further when you are shopping for exchange-traded funds (ETFs). These funds allow you to purchase a basket of stocks in one simple transaction, giving you an efficient (and cheap) way to gain exposure to a sector, an investing style, or even the entire market.

But which funds should you buy?

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Source Fool.com