bobmsmythe

This is generally the way to go for long-term retirement planning for those with mid-level incomes. The same general advice holds, though, in that you should diversify away as much risk as possible, usually by making sure some money goes into bonds and some into stocks, as well as holding some in cash. I will say that it sometimes makes sense to "move" money around in order to rebalance your diversification. That is, assume you start out deciding you want to put 15% of your money into a small-cap fund, 40% into an indexed fund, 30% in a municipal bonds fund, and 15% in cash. These portions of the economy don't move together, which is part of the point of balancing the portfolio. Thus, assume that the small caps are even, the general index is up, and bonds are down. You might find your 15/40/30/15 has become 15/43/26/16. You probably want to move some money from stocks and cash into bonds to rebalance. Don't do it more than about once a year, though. Also, when picking a mutual fund, make sure that you see what charges apply. Especially during a bear market, you don't want to see your investment disappear into activity fees.

Bob