The best place for your money ... what a juicy topic. I wish I had one simple investment to recommend for everyone, but I don't. We're all different. We all find ourselves in different phases of our lives, and in different situations. What's best for me might not be so hot for you. But fear not -- I think there are still some places I can suggest that will appeal to a good range of readers.
If you're young or patient ...
If you're young or have a long investing time horizon, I'd recommend keeping much of your money in stocks, as opposed to bonds. According to the research of business professor Jeremy Siegel, stocks outperformed bonds 74% of the time over all five-year periods between 1871 and 2001. Over all 10-year periods in the same span, that figure rises to 82%. Meanwhile, stocks outperform bonds 95% of the time over all 20-year periods and 99% of the time over all 30-year periods!
If you can't be bothered ...
If the idea of tending to your finances makes your head hurt and your eyes glaze over, I've got an investment for you: a simple index fund that tracks the performance of the overall stock market. For example, money plunked into the Vanguard S&P 500 Index Fund
The stock market -- which is what the S&P 500 roughly tracks -- has advanced, on average, some 10% per year, over long periods. If this pace keeps up, it will be enough to turn $10,000 into close to $70,000 in 20 years, nearly $110,000 in 25 years, and nearly $175,000 in 30 years. Not bad, eh?
If you can be bothered a little ...
If you can handle doing a little legwork for your investments, you can aim to top the market's 10% average return. My personal recommendation here is ... mutual funds. I've been investing in them more and more lately. Once you identify some extremely promising ones, you can sock your money in them and then let the managers do the rest of the work. They'll find undervalued growing companies and decide for you when to buy into and sell out of them.
When you look for top-notch funds, try to read up on fund managers and find ones whose philosophies and styles appeal to you. Look for low fees, a lack of sales loads, low turnover, and strong track records. I've found some very promising funds via our Motley Fool Champion Funds newsletter, overseen by Fool fund guru Shannon Zimmerman. His picks are collectively beating the S&P 500 by 8 percentage points, and his range of recommendations can give you diversified exposure to everything from growth stocks such as Intuit
If you're no longer a spring chicken ...
Of course, if you don't have your 40s, 50s, or 60s ahead of you, you might want to invest a little differently from younger investors. As you approach and enter retirement, it can make sense for many people to pare back their stock investments at least a little bit and replace them with some less volatile options, such as bonds and money market funds.
That said, every investor should consider keeping a significant chunk of his or her money in stocks. Why? Well, even if you're 60, you may well have another 35 years of life ahead of you. In other words, there's still plenty of time for stocks to perform on your behalf.
And if you're looking to perfect a conservative portfolio, Shannon can help you there, too. A free trial to Champion Funds will let you take a look at all of the model portfolios he's constructed. You can copy one exactly, or mix and match his recommendations to suit your needs.
Just click here to get started -- and here's to a happier portfolio!
Longtime Fool contributor Selena Maranjian owns shares of Microsoft, Coca-Cola, and an S&P 500 index fund. Microsoft and Coca-Cola are Inside Value recommendations. The Motley Fool is Fools writing for Fools.