Don't be afraid to take some risks. Since the financial crisis, investors have shunned more volatile stock funds and piled into bond funds because of their perceived safety. Experts are worried that some investors are buying bonds because they've outperformed stocks in the recent past. "We're back to normalized markets," Bold says. He says many investors may be missing a rally in the stock market because they're afraid of losing money on a day-to-day basis. So far this year, the S&P 500 Index has rallied about 12 percent, and most strategists expect the market to continue to improve heading into 2011.
Make sure you're diversified. In your stock portfolio, you should own a mix of small, mid, and large companies. You should make room in your portfolio for both domestic and international funds. For the bond portion of your portfolio, make sure you have exposure to not only treasuries, but also sectors like corporate bonds and even sovereign debt from other countries. That way, if one asset class in your portfolio gets beat up, gains in other areas will help offset some of those losses, Bold says.