Where Should Your Money Go?

Save as much as you can and sit on it for as long as possible. Such is the modus operandi of investing.

What? You want a little more guidance than "hurry up and wait"?

The question on every investor's mind is where to park the dough until it's time to part with it. Here comes another evasive answer: It depends. It depends on your tolerance for risk and your time horizon. But there are some general guidelines that you'd be smart to follow:

For expenses less than five years away: Tax bills, college for your high-school kids, house down payments, rhinoplasty -- often these are events that hover on the near-term time horizon. For short-term goals, stay out of volatile investments such as stocks, and even long-term bonds. Stick with money markets, certificates of deposit, Treasury notes, and short-term bonds. (Here's more on the investing tools at your disposal.) We know these vehicles are far from sexy and, in recent years, are stifled by paltry returns. Still, better safe than sorry.

For expenses between five and 10 years away: Maybe your kids are still in diapers. Or perhaps your dream of a vacation home is still a faint fantasy. Depending on how comfortable you are with investments in the stock market, you might consider putting some of your money in equities. However, as you move closer to your goal, more of your money should be shifted to safer investments.

For expenses more than 10 years away: Retirement. Retirement. Um, retirement. If this blissful state of voluntary unemployment is a decade or more away, you can probably weather the stock market's fickleness with a lot of your dough. The only thing worse than sleeping on cash (or cash equivalents) is waking up at age 65 and realizing that your money is worth less than it was when you were still punching the time clock. The longer your time horizon, the more you mitigate the risks of being in stocks. And history shows that over most 10-year periods, the stock market has been the best place to be. Again, though, as you approach the time you need the money, move toward safer havens.

Here are some more in-depth money ideas at your fingertips. Helpful hint: All of the Fool newsletters offer a free trial and money-back guarantee. Can you afford not to see what opportunities are out there?

Short-term: Find out how to get the most bang for your buck in our Short-Term Savings Center. Compare the rates offered by our partner in savings, MBNA.

Mid-term: Big expenses mean big planning headaches. Don't reach for the Advil. Instead get informed. Find out the ins and outs of mortgages, college costs, car buying and retirement planning. If you're already off the clock, consider income-bearing investments like the ones Mathew Emmert pores over in his monthly Income Investor newsletter. Coming this summer, we'll be poring over ways today's (and tomorrow's) retirees can set themselves up for a sweet future. We'll send you a head's up if you fill out this form.

The future: We've got investment ideas galore -- and the returns to back 'em up. Tom and David Gardner live and breathe for great stock ideas. Click that link to see what they are fancying. Mutual funds on your mind (and in your portfolio)? Make sure they're really the winners. Shannon Zimmerman shows you how in the Motley Fool Champion Funds newsletter.

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