Investing doesn't have to be difficult. Exchange-traded funds let you invest simply but effectively with just a few different pieces to your portfolio.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at how you can use just a few different iShares ETFs to create a simple but effective portfolio. Dan notes that iShares ETFs are highly liquid, with the company that manages the ETFs being the largest player in the industry. Dan suggests looking at the iShares S&P 500 ETF (NYSEMKT:IVV), the iShares Russell 2000 ETF (NYSEMKT:IWM), and the iShares MSCI EAFE ETF (NYSEMKT:EFA) to get exposure to large-cap U.S. stocks, small-cap U.S. stocks, and international stocks respectively. He also points out that iShares Aggregate Bond (NYSEMKT:AGG) has a variety of different types of bonds to provide fixed-income exposure and reduce stock market risk. Dan concludes that by mixing and matching these various funds, you can invest at whatever risk level makes you comfortable. 

Top dividend stocks for the next decade
If you're open to individual stocks, though, the smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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