For most investors, rather than the ETFs you'd be better off waiting until you had a few thousand and then buying the equivalent index funds from Vanguard. The reason is that most people will be adding to retirement investments on a monthly basis, and if you do that with ETFs your transactional cost to buy shares will dwarf the ETF's management fees for quite some time.<p>Although if my memory from several years ago is right, Vanguard charges a sale fee for the fund equivalent of their emerging market fund, to discourage people from trading into and out of it frequently. You can check that on their website -- it would tend to change the above result for most people here.<p>Disclosure: Upwards of 60% of my retirement accounts are ETFs, including the Vanguard ones mentioned. They most important thing, far more important than specific allocation, is that you contribute regularly and do not trade.
<i>And this is despite the fact that on average, experts can't beat a monkey with a dartboard when it comes to picking stocks. Every study has shown this to be true.</i><p>If that is true (and I've certainly heard it repeated often enough), then why is the Harvard endowment managed by a private group of experts? Similarly for just about every large endowment, pension fund, and similar pool of money. If those experts aren't able to either offer improved returns or reduced risk vs. random stock selection (or buying an index fund etc.), then I suspect that the boards of these large institutions wouldn't be paying the money managers' fees.
As a caveat, it should be noted that John Bogle, founder of Vanguard (and the whole index investing movement, for that matter) is not a big fan of the ETFs.<p>Check out <a href="http://www.indexuniverse.com/sections/news/6012-bogle-investors-are-getting-killed-in-etfs.html" rel="nofollow">http://www.indexuniverse.com/sections/news/6012-bogle-invest...</a> to see how Vanguard's ETFs performed against Vanguard's index funds (in short, not well).<p>I agree with Adams that index based investing is a great idea for hands off people, but do yourselves a favor and read Bogle's seminal book on index investing: <a href="http://www.amazon.com/Little-Book-Common-Sense-Investing/dp/0470102101/" rel="nofollow">http://www.amazon.com/Little-Book-Common-Sense-Investing/dp/...</a> first.<p>It's very concise but it will serve you well.
I first heard about index funds from "The Motley Fool Radio Show." Figuring I have the choice of dedicating at least a good chunk of my free time to understanding financial markets and trading stocks, or just dropping my money into index funds until I decide I want to play games with my money and then use that time to surf the web and peruse Hacker News, I chose the later.
It seems to me that the only thing wrong with "betting on the world's growth" in this way is that it's all denominated in US dollars... Maybe 20% in a gold fund like GLD to hedge against the possibility of hyperinflation?