Portfolio for long term?

[MaxPowers]

Help me out on choosing ETFs for my portfolio. I understand we are in a recession and want to get in on it while it is cheap.
My IRA is in Vanguard index 500. Just started it. Should I put next years contribution into the 500 also, or start a new fund?

My account with Zecco is
a little in real estate VNQ
a little in emerging markets VWO
some in GE, microsoft, and google

If I stick with ETFs, what are some good buys? energy? total stock market? Financials? Large caps?... I will most likely stick with Vanguard ETFs because that is what I know.
I am 23. I am willing to do high risk on some investments. My taxable account is mainly to try to build up money for 5-10 years from now.

[Broken Arrow]

I think the most important thing in the beginning is to achieve proper diversification first. After that, we can look into over-weighing certain sectors depending on what you feel is worth buying at this time.

One simple way to approach this, for example, is to sink most of your money into Target Retirement Fund. After that, you can add real estate and stocks. So, in this simplified example, you can have something like 90% VFIFX, 5% VNQ, and 5% in individual stocks.

But you can always change the percentages and holdings as well. Again, this is just a simple example to illustrate one way to achieve full diversification, and then to over-weigh a portfolio towards your individual preference.

VWO isn't included in my example because the Target Retirement fund already invests in emerging markets.

Also, Target Retirement diversifies you along the market caps.

[MaxPowers]

I wish I would have chosen a target fund as my first fund. If I buy into one next year, wouldn't my asset allocation be lopsided? Half in the 500 and half in a target fund? I guess it will even out eventually. What funds do you own in your IRA?
I hear the healthcare fund is good. Is the ETF equivalent good too? VHT

[zetta]

Since you are just starting out, it is too soon to be getting into specific sector funds like healthcare. You want to establish a good foundation first. I would go for the target fund, and not worry about being lopsided so soon.

My dad is a stockbroker. The advice he gave me was to start with a single balanced fund (most likely a growth and income fund) and concentrate on building it up to a target goal, say $200k. (A Target Retirement fund would also be a good choice for your first fund.) After reaching this goal, then it's appropriate to start adding more funds to your portfolio, and also getting more aggressive with a portion of future contributions.

[abbynelson28]

I agree with zetta.. you should first build the foundation and then can look for diversifying in specific sectors...

[Christophercarl]

I would not go chasing specific industries for the long-term. These industries' performance tend to regress towards the mean and historical performance should not be looked at as a predictor of future performance. Broadly diversify yourself and you will be fine if you have a long time horizon.

Zetta is right in that you should build up your assets in broad index funds, and then after a while, you can speculate a little into different sectors or even individual stocks.