OK, you've got a mutual fund or two and you're diversified across stocks, bonds and cash, and you even have holdings from different asset classes.

You're all set, right?

Use our interactive tools to control your finances:
My Investments. Our interactive stock and fund screener will help you make sound investments.
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Not if you want your fund to change the riskiness of your investments as you go through life. Young investors are generally urged to boost performance with stocks. As we grow older, we generally want to change to a more conservative mix of stocks and bonds and as we approach our golden years we look for even fewer equities and more cash and bonds.

Life-cycle funds are designed to do this automatically, so you can buy them in your twenties and hold through your nineties without worrying about whether you're taking on too much, or too little risk.

But the system's not perfect. Adriane Berg, host of the WABC radio talk show on the Wealthbuilder Radio Network says she thinks the funds under perform, certainly compared with some aggressive growth funds and, say, the S&P 50. "I prefer to have people select funds based on their own individual allocations," she says.

Life-cycle funds operate with the notion that it's unwise to put all your eggs in one basket; they spread their portfolios across an array of market segments. This is also important if you can't afford or don't want to pay the minimums for several funds.

The funds are very conservative if you have a low tolerance for risk and some of them will even allow you to change your allocation selection even if it doesn't match the recommendation for your age.

Myprimetime has said it before, and we'll say it again, the best strategy is to take matters into your own hands and develop a personal plan for your money and investments.

But if trying to time the market makes you jittery, or if you are a first-time investor and you choose to let someone else make the decisions for you, life cycle funds are an alternative. It's one-stop shopping and all you have to do is monitor the fund's performance.

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