So, I spent a little time in my last post harping on the advantages of buying index funds. Let’s say you’re convinced. That’s great, but what do you actually buy? What are the best index funds? There isn’t any one right answer, but I can help lead you to where you want to be. Read on, oh reader…

Let’s cut to the chase: if you’re short on time, and want a nice, simple option, do this:

Your Age In Years = % bonds you should be holding.

Buy this percentage in an total bond market fund.

Put the rest into a total stock market fund. You’re done. Just keep re-balancing this portfolio to keep your asset allocation on track.

If you want to get fancier, you’ll need to read up on asset allocation. I highly recommend this book:

It pretty much covers everything you ever wanted to know about creating a diverse portfolio. He shows you how a diverse portfolio can maximize your gains while minimizing your risk, which is a very cool thing (and you thought the speculators had all the fun). Check it out.

Once you’ve figure out which funds to buy, go ahead and pull the trigger! Waiting around will get you nowhere, so get started today.