Timing is everything in comedy, not investing

— -- Q: I recently moved all my stock investments into money market funds because I can't afford to lose. Is it safe to put the money back into stocks?

A: Your question concerns me. If you're so nervous about your stocks that you're willing to jump in and out, your portfolio may be too aggressive.

Remember: You can't control returns. No one knows if stock markets will be up or down in any particular year. But, you can control the degree of risk you take.

Some investments have much lower risk than others, as you've learned. Money market funds, which invest in safe, short-term debt instruments, tend to be very safe. As a result, the returns are also relatively low. If you want security, and little else, money markets are a place to stash money.

But above all, my suggestion would be to stop trying to time the market. Few investors can get into the market when it's about to rise and get out when it's about to fall. Instead, you need to design a portfolio that has a risk level you can live with over time, as you work toward your financial goal.

As I said, it sounds as if your stock portfolio may be too aggressive. You might consider adding bonds to your portfolio, since they are generally less risky than stocks.

Meanwhile, maybe you might think about adding a diversified basket of large U.S. stocks, by buying an index fund or exchange traded fund (ETF) that tracks an index such as the Standard & Poor's 500. By owning this index of 500 companies, rather than trying to pick winning individual stocks, you will lower your overall risk.

Finally, you might decide to add a bit of international stocks to your portfolio, since they can move differently from U.S. stocks.

Designing an appropriate portfolio is beyond your question. But you can search the Ask Matt archive to get details on how to create the right portfolio.

It's time to sit down and figure out your financial goals, how much risk you can tolerate and then decide what kind of portfolio will get you there.