How to choose investments?

[Anonymous]

I have some money in savings that I'd like to invest in mutual funds, but I am completely overwhelmed by everything out there and don't feel like I have a great grasp on how to make sure I have a well-rounded portfolio. I have a 401k through work, so picking those investments was easy, because we are limited in what we can choose from, but for a separate, non-retirement account, I don't know where to begin. How do you decide what to invest, how much, and how to split money between different mutual funds? Thanks!

[Anonymous]

Go to bogleheads.com and read the wikis. thank me later.

http://www.bogleheads.org/wiki/Asset_Allocation

[Anonymous]

If you're okay with stock market risks, just buy one of the Vanguard's market index funds. It's the cheapest in expense ratio.
Over 90% of the actively managed funds do not outperform market index on a consistent basis. It'll would be awfully hard and risky to try to pick the rest 5% or 10%.

[Anonymous]

Both PPs gave helpful advice. Vanguard has funds that will mix stock and bond indexes too (both static and lifecycle).

[Anonymous]

The bogleheads forum is ok, but it can be overwhelming at first. I'd say start with a book from the library on personal finance. Anything by John Bogle or the bogleheads is probably good. I liked "Random walk guide to investing" and "I will teach you to be rich" (aimed at 20 somethings, but still relevant).