Here we are back in the land of crazy volatility. Don't you just wish the market would hold still for a few weeks so you could get your portfolio realigned?

I suppose we shouldn't be surprised that things have gotten choppy again. This week's layoff announcements were staggering, but not really surprising. Ditto the increasingly dire reports about zombie companies like Citigroup (NYSE:C) and Bank of America (NYSE:BAC) and the increasingly dire predictions for 2009 from the IMF, black swan spotter Nassim Nicholas Taleb, and nearly every economist on the planet. Probably Santa Claus, too, though I haven't talked to him lately.

It's hard to know what to do. On the one hand, the temptation to keep your nest egg in cash can be overwhelming. On the other hand, there is money to be made out there, and keeping the retirement accounts in cash seems almost like a cop-out. After all, we're supposed to be thinking long-term, right?

Right. But I think we can move back into the market without being stupid about it. If you're wondering what to do with that cash, here are a couple of ideas to consider.

Hire some help -- on the cheap
By now, you've heard the case against actively managed mutual funds -- three out of four of them lag the market over the long term, fees are high, turnover is unreasonable, many managers don't have the experience to deal with down markets, and on and on. It's a strong case.

But there are times when an active fund makes sense. Down markets are one of those times. Autopilots like index funds are fine during good times, but having the right veteran professional investment manager at the helm of your portfolio can make your passage much safer when the market's weather gets rough.

Choosing the right fund is the trick, though. Obviously you want to stick with that winning 25%, but there are other important factors:

  • A long-tenured management team with experience in all kinds of market conditions.
  • Low portfolio turnover, meaning that the managers tend to buy and hold for longer periods.
  • Low fees and expenses, because those come out of your pockets.

And the big one, which is occasionally overlooked in the rush to get a "good fund":

  • What's the fund's investment objective, and does it fit with my portfolio?

Let's think about that last one for a minute.

Buy the right good one
As I noted recently, lots of good funds that had been closed to new investors have reopened in the past year. For the first time in a while, some of the fund industry's best products are available to just about anyone. But being "good" isn't enough. If you're looking to dip your toe back into the water -- to get your IRA reinvested, say, in one good fund without taking too much risk -- some funds just won't fit.

Take Fidelity Contrafund (FCNTX). "Contra," as Fidelity insiders call it, is Fidelity's golden giant -- five stars from Morningstar, all-universe fund manager Will Danoff, low fees, big positions in strong stocks like Genentech (NYSE:DNA), McDonald's (NYSE:MCD), and Gilead Sciences (NASDAQ:GILD) ... it's a very good product, if you want a large-cap growth fund.

If you're in the situation I'm talking about, though, I think you probably don't -- at least, not as your sole IRA holding, not right now. You want something that's a little bit dialed back, something that still has market-beating upside but with more of a handle on volatility. Maybe something more like a balanced fund, with a solid bond portfolio to complement its stock holdings -- but without the extra fees that come with some target-date funds and other specialized "retirement" products.

Does that sound good? If so, my fellow Fool Amanda might have just the fund you're looking for.

One fund for right now
"Amanda" is Amanda Kish, Foolish fund wizard and lead advisor of the Champion Funds newsletter. She's been watching the list of reopening funds for a while now, and one of her favorites recently reopened the gates. It's a balanced fund with a difference -- the difference being strong performance without excessive risk. It meets all of the requirements I listed above handily. As with so many great funds, extremely rigorous investment selection standards -- key stock holdings include names like Medtronic (NYSE:MDT) and ITT (NYSE:ITT), both Motley Fool CAPS favorites -- keep it near the top of its peer group.

What's the fund? Sorry to be a tease, but you should really read Amanda's full report on it in the new issue of Champion Funds to decide whether this fund is right for you. Champion Funds is a paid service, but a free trial gets you full access for 30 days with no obligation -- click now to get started.

Fool contributor John Rosevear has no position in the stocks or funds mentioned. ITT is a Motley Fool Inside Value recommendation. Bank of America is a former Motley Fool Income Investor pick. Try any of our Foolish newsletters free for 30 days. The Fool's disclosure policy knows a smart move when it sees one.