Have you seen Fun With Dick and Jane, starring Jim Carrey and Tea Leoni?

It's the comical story of how Dick Harper -- played by Carrey -- loses his job when his company, Globodyne, goes under. What's worse, he also loses his savings and the promise of a retirement pension -- because they were entirely tied up in Globodyne stock.

The movie recounts the couple's attempt at making their way blue collar-style, but when they ultimately resort to armed robbery, it leads them to an unexpected confrontation with Dick's old boss. All in all? One and a half thumbs up.

A movie review? I thought you cover stocks!
I couldn't help but notice how similar Dick Harper's situation is to those unfortunate folks -- including an uncle of mine -- currently employed by General Motors (NYSE:GM).

The company suspended its dividend, spelling trouble for those who hoped to rely on it for retirement income. The stock itself is at a 54-year low -- which means that money invested in it has actually depreciated over the last half-century. And analysts at firms such as Merrill Lynch speculate the company might eventually file for bankruptcy -- which means the stock has the potential to go to zero.

For employees like my uncle, who has most of his savings tied up in GM stock, retirement is looking pretty bleak.

And home equity? Not a chance. In fact, the job market in Detroit is so soft that the city has been dubbed "the foreclosure capital of the U.S."

Risky business
The most obvious lesson to learn from this scenario is that it's extremely risky to place a significant portion of your savings in your company's stock -- even if your company is the world's leader in its industry, as GM has claimed to be.

Sure, if you're lucky, it could be a pathway to a very comfortable retirement, as another uncle, employed by ExxonMobil (NYSE:XOM), can attest. And yes, it's better to be invested in the market than sitting on the sidelines.

But in order to build a portfolio that will provide you with a secure retirement, you have to be diversified.

The color of money
As I've pointed out before, a smart and diversified asset allocation plan is the best way to save, even for the most aggressive investors. Only a well-diversified portfolio can keep losses at a minimum during inevitable market downturns like the one we're experiencing today.

Here's how Rule Your Retirement advisor Robert Brokamp believes those with more than 10 years to retirement should divvy up their assets, and a good hint at why:

Large-Cap Stocks

Small-Cap Stocks


International Stocks

Suggested Allocation





Annualized Return from 1976-2006






McDonald's (NYSE:MCD), General Electric (NYSE:GE)

Silver Standard Resources (NASDAQ:SSRI), Sotheby's

Duke Realty (NYSE:DRE), Realty Income

Shengdatech, China Mobile (NYSE:CHL)

Large- and small-cap data from Ibbotson Associates; REIT data from the NAREIT Index; international data from the EAFE Index.

As you can see, small caps have significantly outperformed their larger brethren over the past 30 years -- but investments in these companies also carry a higher level of risk. The same could be said of REITs. Yet a portfolio that allocates a portion of overall assets to each asset class is able to make the most of those gains, while keeping all risk in check.

Brokamp has more specific advice for diversification, as well. To take a look at his recommendations, as well as model portfolios for those about to retire or those already in retirement, consider a free 30-day trial of Rule Your Retirement. To find out more, click here.

Adam J. Wiederman owns no shares of the companies mentioned above. Sotheby's is a Hidden Gems pick. Duke Realty is an Income Investor pick. The Fool's disclosure policy loves Jim Carrey comedies.