There are so many interesting investments out there these days, and such little time -- and money, of course -- to go around. We have limited resources in more ways than one, but thankfully you can go a long way with any amount of money that you want to see ideally appreciate over time. 

What would you do with $5,000? When I have money I want to put to work, I like to divide my portfolio allocation strategy into two camps. I buy what I know -- that's fairly obvious. Then I take what's left and buy what I don't know.

I totally get it if you need me to elaborate on that. The first part of that strategy is easy, and it will always be the largest part of any investment. I will buy into stocks and industries that I feel I know fairly well. However, I also think it's important to dip my toes into other promising investments in areas in which I don't feel I necessarily have an edge when pitted against Mr. Market. It's in that scenario that I turn to exchange-traded funds (ETFs).

Let's dive right in with some of my recent stock moves.

Dollar bills raining from the sky on a person with outstretched arms.

Image source: Getty Images.

Buy what you know

I don't need to think hypothetically in arriving at what I would do with $5,000. Let's talk about some of stocks that I recently purchased. I initiated a position in Digital Realty Trust (DLR 0.93%) on Monday, following that up a day later with a new stake in Bumble (BMBL). Earlier this month, I doubled my position in fuboTV (FUBO -1.67%)

I believe that the popularity of tech and cloud computing will continue to grow globally, and all of those digital data files have to live somewhere. Digital Realty Trust is one of the world's largest operators of data centers. It has more than 290 facilities across two dozen different countries, and it collects fees from the companies that lean on its servers. I also naturally don't mind the quarterly distributions. As a real estate investment trust, Digital Realty Trust returns the lion's share of its funds from operations to its shareholders. The 3.1% yield is nice, and knowing that a hike in February boosted its streak of annual payout increases to 16 years confirms that I'm on the right track. 

On Tuesday I took advantage of the tumble in Bumble. The company behind the world's second and fourth most popular dating apps went public at $43 three months ago. It traded as high as $84.80 in its IPO frenzy, but has now shed more than half of its value to trade below its debutante price. Why Bumble? Online dating is a no-brainer play on the country's reawakening from the COVID-19 crisis. It's also growing faster and trading at a lower revenue multiple than Tinder's parent company.

Finally we have fuboTV, the live TV streaming service that has seen its subscriber base more than double over the past year. I have owned fuboTV since last year, but the stock has fallen sharply. I doubled my position ahead of earnings earlier this month, and so far it's been the right call. The company had a blowout performance, and it's gaining market share in a streaming niche that will only continue to grow as more people move on fro

Buy what you don't know

You're never going to be a master of every market category, but this doesn't mean that you should have 100% of your investments working just in a single industry or market that you know the best. It's important to diversify, and thanks to ETFs, closed-end funds, and conventional mutual funds it's easy to buy a basket of stocks to achieve instant diversification. 

Vanguard Total International Stock Index Fund (VXUS -0.56%) is an ETF that takes a popular global all-cap benchmark and strips it of its U.S. components. That's where the "ex-U.S." comes from its ticker symbol. This is a great way to buy an international index fund where you will immediately own a sliver of more than 7,000 non-U.S. stocks. Vanguard's penchant for low fees will have you dealing with a dirt cheap expense ratio of 0.08%, meaning that the fund's management fees over the course of a year will only eat up $0.08 of a $100 investment. 

Think about any holes in your portfolio. Think about where you would want to diversify? There are plenty of ETFs specializing in everything from real estate to commodities to emerging market debt. If you don't feel experienced enough to sell short-term covered calls on your stocks to generate income at the expense of your upside, or if you don't have time to play the merger arbitrage game -- and I'm with you on both fronts -- there are ETFs that do that for you.    

Buy what you know, because that is your advantage in beating the market. Buy what you don't know, because that's the best way to diversify your portfolio.