I understand this might be a subjective matter. The context from which I'm asking is this: a friend and I were talking about my "portfolio" (I use the term loosely), which is currently just two very simple investments: one in a domestic total stock market index fund (VTI, if it matters), and another in a similar fund for the international stock market (kind of embarrassing, but I don't remember which one at the moment—anyway, I'm hoping it's not really critical to the question).
I am of the opinion that for me, this is a great approach as I'm not passionate about researching different stocks but also don't want to put all of my eggs in one basket. My rationale is that by spreading my investment roughly evenly across the entire stock market through VTI, I'm basically just investing in the continued growth of the U.S. economy (and the same goes for the international fund). Which feels to me pretty low-risk over a long enough period of time.
My friend, however, felt that by investing in only these funds I am doing the very thing I want to avoid—i.e., putting all my eggs in one basket. He encouraged me to invest in other funds as well, to better diversify and not be quite so vulnerable in the event that VTI performs poorly in the coming years.
To my mind, this is a backwards recommendation since investing in other funds that are not so broadly distributed across the entire market will effectively just make my overall portfolio more lopsided in favor of the more specialized funds. But maybe I'm missing something? Do I need to rethink my strategy? Is there something I'm overlooking?