How Should You Invest Your Money in a Volatile Stock Market?

If you are concerned about being diversified, you should invest in mutual funds. Buying a mutual fund will spread your risk across all the stocks that the particular mutual fund holds.

Make sure you contribute up to the company match in your 401(k). This is free money and you should think of this as part of your rate of return. So for example, if your company matches 50 cents on a portion of your contribution, then you have actually made 50 percent on that portion of your investment.

As you grow older you should re-evaluate your portfolio. When you are younger almost all of your portfolio should contain stocks, as that will give you the best long-term growth potential. As you near retirement you should cut down your stock exposure, and move some of your portfolio into bonds and cash in order to protect your money for your retirement years.

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