There are absurb amounts of scholarly ink spilled on these subjects and, as always, opinions differ. Mainstream financial research has settled on something of a consensus over the years. Basically, you want to be invested in a very broadly diversified portfolio which you have set up with target allocations and rebalance regularly to avoid drifting too far away from your chosen allocation (and this allocation is chosen to meet your return requirements and risk tolerance). The more asset classes you can add without spending too much money, the better.
All that said, for an individual investor with less than half a million in assets who does not want to buy an all-in-one fund, I think this can be simplified without getting too nuts. The main assets you would want are international equities (both emerging and developed), domestic equities (large through small cap), fixed income (cash through junk bonds) and perhaps a few optional vehicles (commodities, real estate, merger arbitrage). A minimalist way to do this is a total international fund, a total domestic fund, and a bond index fund. Or you could get more complicated. I use a mix of individual stocks and ETFs for both international and domestice equities, and for bonds I mostly use CDs, cash and individual corporates.
More importantly, you need to figure out your asset allocation. All the studies I have seen demonstrate that choosing the right allocation, sticking to it, and adjusting your targets as your situation changes are what makes you successful over time. Spend some time reading and thinking about asset allocations. Mine have changed over time. When I was younger and accumulating more rapidly I was 80 to 90% total equities. Now that I am looking at walking away from the day job for semi-retirement in a year, I am cruising around 60% equities. Get the allocation right and you are 90% of the way there.