spreading your money across a variety of investments. Even when you reach retirement age, you should maintain exposure to stocks so you lower the risk of outliving your money. That said, although everyoneâ€™s circumstances are different, my general rule of thumb for asset allocation is indicated in the accompanying charts.
It is critical to regularly re-examine your investment choices. When evaluating mutual funds, look for strong long-term track records; consistent portfolio management; and low fees. Also: make sure you are not over-weighted in your companyâ€™s stock and that you maintain diversification in the stock portion of your portfolio using a variety of mutual funds rather than individual securities.
Mellody Hobson is the president of Ariel Capital Management L.L.C./Ariel Mutual Funds, a Chicago-based mutual fund company and money management firm. She is also a regular financial contributor to ABCâ€™s Good Morning America.