Google "Retire rich" and you'll get more than 1.4 million helpful hits. Most of them offer the same advice:

  1. Start now.
  2. Save more.
  3. Take full advantage of employer contributions.
  4. Allocate your assets to make bank in the stock market.
  5. Don't rely on someone else to do it for you.

That's how you retire rich in five simple steps.

You're glad you read this article, aren't you?
Of course, it's not that easy. Whole volumes can be written about ways to maximize each step -- and that's why a "Retire rich" query will get you 1.4 million hits.

So rather than take on all five steps at once here, I'll focus on what I focus on everyday at The Motley Fool: Helping you allocate your assets to make bank in the stock market.

The 1,400,001st piece of retirement advice you'll read today
Again, this is not uncovered territory. Google "retirement stocks" and you get another 200,000 hits. A few of those are the product of Money magazine writer Michael Sivy. His retirement stock columns, which seem to be published annually each October, offer some good advice:

  1. Keep costs low.
  2. Take a long-term view.
  3. Pick market-beating stocks you can hold for "at least five years."

Obviously, that last point is the rub. How can you find the stocks that are poised to beat the market for the next decade or more?

Sivy says ...
Like any good financial columnist, Sivy has suggestions. In his 2005 column, he listed Amgen, Cisco Systems (NASDAQ:CSCO), FedEx, Intel (NASDAQ:INTC), Lowe's (NYSE:LOW), General Electric, Johnson & Johnson, Procter & Gamble, Raytheon, 3M, Citigroup (NYSE:C), DuPont, Pfizer (NYSE:PFE), and Sara Lee. In 2006, he narrowed that list to GE, P&G, Applied Materials (NASDAQ:AMAT), Burlington Northern, JPMorgan (NYSE:JPM), Anadarko Petroleum, and FPL Group.

Most of these are solid companies. Indeed, I own shares of 3M and wouldn't hesitate to point friends and relatives to a few of the others. That said, I think Sivy is way off when it comes to his methodology.

Consider, for example, that these 19 names have a collective market cap of $1.9 trillion, an average market cap of $110 billion, and a median market cap of $61 billion. In other words, by effectively recommending a significant chunk of the S&P 500's top holdings, Sivvy has recommended a pool of stocks that won't beat the market by any meaningful degree.

Why? Because they are "the market!"

Diversification this is not
What's more, you tell me if, after looking at the following table, you want to concentrate your entire portfolio in large-cap stocks of any variety:



Large cap



Small cap



*Fama & French data, 1927-2005.

The numbers don't lie, and the numbers say you may want to stash some of your portfolio in small-cap value stocks -- the market's best-performing segment historically.

The Foolish bottom line
Perfecting your retirement plan can take a lot of work, and while there's lots of free retirement advice floating around out there, much of it is too generic to get you to where you want to be.

If you're looking for some more personalized guidance, consider joining our Motley Fool Rule Your Retirement service. Say, for example, you're looking to better allocate your assets to help you make bank in the market. Rule Your Retirement has designed aggressive, moderate, and conservative portfolios that you can model yours after, as well as a DirectAdvice Planning tool to help you tweak the portfolios to fit your unique situation. You can take a look at these resources, as well as everything else that Rule Your Retirement has to offer, with a free 30-day trial.

Tim Hanson owns shares of 3M. FedEx is a Motley Fool Stock Advisor recommendation. Intel, Pfizer, and 3M are Inside Value selections. Johnson & Johnson and JPMorgan are Income Investor picks. The Motley Fool has an aggro disclosure policy.