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Stocks are probably the most well-known option, but picking and choosing individual companies to invest in is not how most people get involved in the market. Instead, you might want to consider an index fund, which invests in the securities included in indexes like the S&P 500.

Bonds—investments in which you loan money to a corporation or government at a fixed interest rate—are another major asset category. They tend to offer lower returns than stocks, but there’s typically also less associated risk because their prices are largely based on the creditworthiness of who’s issuing the bond, as well as the bond’s interest rate, and not market fluctuations.

Generally, the longer you have before needing the money, the more risk you may be able take on; this might mean that you hold more stock investments (like stock index funds) in your portfolio. But as you draw closer to withdrawing, the more you may want to skew toward conservative assets, like bonds, because you want to decrease the volatility in your portfolio the closer you get to needing the money.

Beyond stocks and bonds, Blaylock says, there are alternative investments, such as real estate or commodities. In the past, if you wanted to invest in real estate, you’d probably have to buy property—but you can now consider investing in real estate investment trusts, also known as [REITs].

The same is true for commodities, like precious metals or oil—you don’t have to buy bars of gold or barrels of oil. You can invest in exchange-traded funds, or [ETFs], that track commodity markets. Mutual funds are also a way to incorporate a variety of assets into your portfolio, because they can hold stocks, bonds, real estate *and* commodities.

One of the main reasons to consider investing in commodities is that “they serve as inflation hedges,” Blaylock says. “During times when there’s higher-than-normal inflation, these investments tend to do pretty well. And the closer [you are] to withdrawing your money, the more inflation becomes a concern.”

Being a master stock-picker may sound sexy, but for most investors, it’s probably a bad idea. Studies show that choosing stocks is almost always a losing proposition—even for the pros. “The risk [versus] reward of owning stocks is simply not in your favor,” explains Winkler. Plus, the more you trade stocks, the more likely you are to incur trading fees, which eats into any money you’d make.

The bottom line: You don’t have a crystal ball. “I think we are very naïve if we feel like we have the secret to selecting which companies will perform [well] and which will fail,” says Blaylock.

Risk tolerance comes down to how much risk you are willing and able to stomach, and it’s important to know because it can impact how you shape your portfolio. Winkler suggests a simple gut check: “If you’re up [at night] thinking about your investments and fearing that a down market may bring your portfolio down too much, then you may be carrying too much risk,” he says. On the flip side, if you’re worried that you could be missing out on earning potential, your investments might be too conservative. You can help gain a more quantifiable measure of your risk tolerance by taking [quizzes] to help you figure out whether you’ve got a more aggressive or conservative mindset. Just remember that your time horizon will also be pivotal when figuring out how much risk to take on. As we mentioned earlier, the closer you are to needing the money, the more likely you should consider shifting to conservative investments.

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