You are on the right track. ETFs will provide the best long-term returns (20+ years) because:

1. Much cheaper expense ratio. Saving one half of one percent (or more in annual management fees) produces a substantial savings of $500 on a $100,000 investment. Assuming average historic annual market growth of about 11% per year, this savings will provide you with an additional $6,395 over a ten-year period, assuming 11% avg. annual growth..

2. Studies have shown that over 20 years, only one out of 20 money managers beat the market. To me, this means you are gambling by trying to find the rare winner.

3. A portfolio of ETFs is much easier to manage.

You should have no more than 5 or 6. If you are a long-term investor, sector diversification does not provide better long term results than total market funds. Thus if you have a tech fund, energy fund, financial fund, small cap fund and large cap fund you won’t do any better after 20 years than having one US total market fund.

But, if you want to have 6 funds, annual re-balancing will cost $130 for 12 trades at Chas. Schwab. There are cheaper brokers out there at $5 a trade.

Don’t forget overseas investing. Foreign markets are fast approaching US capitalization levels. Buy lots of VEU. Add a bond fund (GIM) and a money market fund and you’re all set! VTI 35% VEU 35% GIM 20% and money market 10%. Rebalance once year to preserve these allocations and spend the time in between doing something productive instead of haunting Yahoo! Finance message boards.

4. You will have no agita wishing you hadn't bought that stock or mutual fund. Of course, there may be some envy of those who trade and claim to earn huge amounts by speculating in this or that product. But if you're a grownup, you will be content that with an ETF strategy you will be doing much better than having your money in the savings bank or gambling on individual stocks or mutual funds.

Do your own research on ETF investing and you will learn that it's not as exciting as speculating in stocks or mutual funds - but is the best strategy for normal human beings.