What percentage of your assets should you keep in growth oriented equities if your timeline is short? According to Financial Planner Martin B. Lauder, CFS, the specific balance is an individual choice, but generally financial advisers recommend shifting the balance away from growth-oriented funds as your approach retirement. By the time you actually retire, your conservative investments should be in the majority.

Developing a diversified portfolio that reflects your personal horizon is the smartest way to invest in the stock market. Diversification is especially important if your time line is less than 10 years.

Dividing your investments between equities and other asset classes such as bonds, real estate investment trusts will position you to benefit when the market rises, while reducing the impact of market downward swings.