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Your money should be invested in combination of cash, bonds and stocks that the nature of this combination should change over time as your life situation changes.
Your financial life into four district periods, the getting started years, the making money years, the preretirement years and the retirement years. At each point, your needs and goals are different and as a result you should probably have a different combination of investments.
In order of risk from safest to most risky, these are cash, bonds, income investments, growth investments, growth and income investments and aggressive growth investments.
As you work your way up the pyramid, you take more risk, moving from growth and income to growth to aggressive growth. Aside from the fact that you always want your retirement account to be built from the ground up with safe investment first, the mixture of risk categories that is right for you depends on your age. The younger you are, the more risk you can afford, since you have more time to ride out a bad stock market or other economic downtown. The opposite is true for someone who is already retired. The principle is amazingly simple and what is more, it actually works.
I suggest you put your money in appropriate mutual funds. Mutual funds not only offer professional money management, diversification and ease of use but most now allow you to start investing with a little as $50. Some even accept monthly investments as low as $25.
