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.