Do you suffer from advice overload?

I know I do. "Expert" advice is everywhere. And doesn't it seem like half of it contradicts the other half? Should I drink caffeine or not? Eat more carbs or not? Change my car's oil every 2,500 miles or every 10,000? Keep a big chunk of my retirement portfolio in bonds or not?

A little Googling can turn up contradictory "expert" opinions on just about anything. How do we know what to trust?

They recommended WHAT?
Most of us are experts on something. I'm sure you've seen off-base "expert" opinions in your own area of specialty. I sure have -- I was taken aback recently when my local newspaper ran a "financial makeover" feature in which a woman in her mid-40s was counseled by an "expert" to keep 40% of her retirement portfolio in bonds to offset the risks of her stock fund investments.

To my mind, which can claim a few expert credentials of its own, that 40% is about 100% too much for someone who has 20 years or more to go until retirement. Unless there are special circumstances or she's unusually risk-averse -- and there was no hint of either in the article -- that person should be in stocks, period, for at least the next 10 years. The risks of not being in stocks are pretty sizeable.

Risk isn't always where you think it is
To see what I mean, compare the performance over 10 years of $100,000 invested in a hypothetical portfolio of dividend-paying blue chip stocks -- the kind of stocks a retirement investor worried about risk should feature prominently in her asset allocation -- versus $100,000 in a basic bond fund, in this case Fidelity Intermediate Bond Fund.


Total 10-Year Return

$12,500 Grows To ...

Altria Group (NYSE:MO)



Dow Chemical (NYSE:DOW)



General Electric



General Mills (NYSE:GIS)






Procter & Gamble (NYSE:PG)



Ryder System (NYSE:R)



Time Warner (NYSE:TWX)



Source: Yahoo Finance. Returns from Aug. 17, 1998 to Aug. 17, 2008.

After 10 years, our investment in Fidelity Intermediate Bond is worth about $162,000. That's a respectable 62% return, which doesn't sound too bad... until you look at our stock portfolio, which is now worth more than $233,000.

And when you think about the risks of stocks, consider this: We bought those stocks high up in the 1990s bull market, when lots of them were relatively overvalued. We then went through the dot-com crash, an unusually severe bear market, several years of sluggish performance for large caps as a whole, and another bear market, which we're still in -- and we still came out way ahead of bonds!

You don't always get what you pay for
The guy they quoted in that article is a local financial advisor. I don't know what his background is, and I don't know whether he thinks that scaring people out of stocks will generate more business for his practice, he's just parroting something he was taught long ago, or he sincerely believes, deep down in his heart, that having more than 60% of your retirement portfolio in stocks is too risky.

I do know that lots of online "planning tools" -- including, most likely, the one built in to your 401(k) plan's website -- tend to suggest larger allocations to bonds and money market funds than I -- and many independent experts -- think are reasonable. Those suggestions are driven in part by liability concerns, and they're insisted upon by cautious corporate lawyers, not by research into how to maximize a portfolio's performance over time.

Finding the real experts
My opinions, on the other hand, are based on the results of research from genuine experts, and clearheaded thinking from objective sources with no axes to grind, products to push, or corporate behinds to cover.

That kind of thinking is hard to find, but it's out there. When it comes to retirement investing, my favorite place to find it is the Fool's Rule Your Retirement newsletter service. It's independent, it doesn't accept advertising, and it delivers everything you need to get the most out of your retirement accounts.

Whether you're seeking timely how-to articles, interviews with the best researchers, tools and models that make concepts like asset allocation easy to understand and implement, or professional answers to your questions, they're all there. Better yet, a full year's worth costs less than you'd pay for an afternoon with that investment advisor. Be our guest and try it free for 30 days, with no obligation.

Fool contributor John Rosevear does not own any of the stocks mentioned. Dow Chemical is a Motley Fool Income Investor recommendation. Time Warner was a former Stock Advisor pick. Try any of our Foolish newsletter services free for 30 days. The Fool's disclosure policy knows what the experts are holding and when they're folding.