Creating a solid, well-diversified stock portfolio can be much easier than people imagine. It doesn't take hours of research or investing in hundreds of individual companies -- it just takes a few broad exchange-traded funds (ETFs). If I had $20,000 to invest from scratch, here's how I would do it.

If there was one must-have investment that everyone should have in their portfolio, it's an S&P 500 index fund. The S&P 500 is the most followed index on the stock market, tracking the largest 500 U.S. public companies by market cap. There's a reason Warren Buffett swears by the S&P 500: It works, historically returning around 10% annually over the long term.

There's very little difference between S&P 500 index funds, but the Vanguard S&P 500 ETF (NYSEMKT: VOO) is a good go-to because of its low cost with a 0.03% expense ratio. Containing large-cap and blue chip stocks, this ETF is equipped to provide respectable long-term returns.

Continue reading

Source Fool.com