Opening your first E*TRADE account is exciting—but it can also be overwhelming. With thousands of ETFs and stocks available, many beginners end up asking the same question: What should I actually invest in?

The good news is that you don’t need a complicated portfolio filled with dozens of funds. In fact, many long-term investors build successful portfolios using just a handful of low-cost ETFs.

This guide covers three beginner-friendly ETFs that can provide broad market exposure, growth potential, and dividend income, along with suggested portfolio allocations based on your age and the common investing mistakes to avoid.

1. SCHB – Schwab U.S. Broad Market ETF

If you could only buy one ETF to start investing, SCHB is an excellent candidate.

The Schwab U.S. Broad Market ETF provides exposure to nearly 2,400 publicly traded U.S. companies, giving investors instant diversification through a single purchase.

Its holdings include some of the world’s largest businesses, such as:

• Apple
• Microsoft
• Amazon
• Alphabet (Google)
• Nvidia
• Thousands of additional mid-sized and smaller companies

Instead of trying to pick winning stocks, you’re investing in the overall U.S. stock market.

Why beginners like SCHB

One major advantage is affordability.

Unlike Vanguard Total Stock Market ETF (VTI), which often trades at a much higher share price, SCHB is considerably less expensive per share. Since E*TRADE doesn’t offer fractional shares, buying lower-priced ETFs allows beginners with smaller budgets to start investing sooner.

Other benefits include:

• Broad market diversification
• Very low expense ratio (0.03%)
• Simple long-term investment strategy
• Accessible share price

For many new investors, SCHB can serve as the foundation of an investment portfolio.

2. SCHG – Schwab U.S. Large-Cap Growth ETF

While SCHB owns almost the entire U.S. market, SCHG focuses specifically on America’s largest growth companies.

This ETF contains approximately 200 companies that are leading innovation and driving market growth.

Examples include:

• Nvidia
• Apple
• Microsoft
• Amazon
• Meta
• Alphabet

Growth companies typically reinvest profits into expanding their businesses rather than paying large dividends.

Why consider SCHG?

Growth ETFs have historically delivered strong long-term returns, although they also experience larger price swings during market downturns.

SCHG offers:

• Exposure to leading technology and growth companies
• Low expense ratio (0.04%)
• Affordable share price
• Long-term growth potential

Because of its higher volatility, SCHG is generally better suited for investors with a long investment horizon who can tolerate market fluctuations.

3. SCHD – Schwab U.S. Dividend Equity ETF

Unlike the first two ETFs, SCHD focuses on established companies that consistently pay dividends.

Instead of emphasizing rapid growth, SCHD invests in financially strong businesses with long records of rewarding shareholders through regular dividend payments.

The ETF includes roughly 100 high-quality dividend-paying companies across various industries.

Why beginners should consider SCHD

Dividend investing offers a different benefit.

While growth ETFs aim to increase your portfolio value over time, SCHD also provides cash distributions through dividends.

Benefits include:

• Regular dividend income
• Exposure to mature, financially stable companies
• Low expense ratio (0.06%)
• Good complement to growth investments

Although dividend ETFs may fluctuate during bear markets like any stock fund, they often provide a more stable investing experience compared to aggressive growth funds.

Why These Three ETFs Work Well Together

Each ETF plays a different role in a diversified portfolio.

While there is some overlap between the funds, each has a unique objective:

• SCHB captures the entire U.S. stock market.
• SCHG emphasizes high-growth companies.
• SCHD focuses on quality dividend-paying businesses.

Together, they provide diversification without becoming overly complicated.

Suggested Portfolio Allocation by Age

One of the biggest questions beginners ask is how much to invest in each ETF.

A simple approach is to adjust your portfolio based on your investment time horizon.

Investors in Their 20s and 30s

With decades before retirement, younger investors generally have more time to recover from market downturns.

Example allocation:

• 50% SCHB
• 40% SCHG
• 10% SCHD

This portfolio emphasizes long-term growth while maintaining a small dividend component.

Investors in Their 40s

As retirement approaches, balancing growth with income becomes more important.

Example allocation:

• 40% SCHB
• 30% SCHG
• 30% SCHD

This mix still prioritizes growth while increasing dividend exposure.

Investors in Their 50s

Investors may begin shifting toward greater portfolio stability.

Example allocation:

• 35% SCHB
• 25% SCHG
• 40% SCHD

Dividend income starts playing a larger role while maintaining meaningful growth exposure.

Investors Age 60 and Older

Many retirees prioritize dependable income over maximum growth.

Example allocation:

• 30% SCHB
• 20% SCHG
• 50% SCHD

This approach places greater emphasis on established dividend-paying companies while still maintaining some exposure to market growth.

Important Note About Risk

Although SCHD tends to be less volatile than growth ETFs, all three funds invest exclusively in stocks.

That means they can all decline during major market downturns.

Investors seeking additional downside protection often introduce bond ETFs into their portfolios later, but many beginners choose to keep things simple by starting with an all-stock portfolio.

Beginner Investing Mistakes to Avoid

Even with excellent ETFs, mistakes can reduce long-term returns.

1. Chasing Past Performance

Many investors buy funds simply because they performed well last year.

Unfortunately, yesterday’s winners are not guaranteed to outperform in the future.

Instead, focus on low-cost, diversified investments designed for long-term growth.

2. Owning Too Many ETFs

Buying multiple funds that hold nearly identical companies doesn’t create meaningful diversification.

For example, owning several broad U.S. market ETFs often results in significant overlap.

A simple portfolio built around a few carefully selected ETFs is usually easier to manage.

3. Buying Trending Individual Stocks

Many beginners jump into popular stocks after large price increases.

Unfortunately, buying after a stock has already surged often leads to disappointing results if prices reverse.

Broad-market ETFs help reduce this risk by spreading investments across hundreds or thousands of companies.

4. Ignoring Expense Ratios

Fees may appear small, but they compound over time.

A fund charging 0.50% annually may cost investors thousands—or even tens of thousands—of dollars over several decades compared with a comparable ETF charging less than 0.10%.

Choosing low-cost ETFs allows more of your investment returns to stay in your portfolio.

Final Thoughts

For beginners investing through E*TRADE, building a portfolio doesn’t need to be complicated.

A combination of:

• SCHB for broad market exposure
• SCHG for long-term growth
• SCHD for dividend income

provides a simple, diversified foundation that can grow with you over time.

Rather than trying to predict the next winning stock or constantly switching investments, focus on consistently contributing to a well-balanced portfolio, keeping costs low, and staying invested for the long term. For many investors, those habits are far more important than finding the “perfect” ETF.