If you have an EF level you are comfortable with, don't think of it as "investments". It should be considered a completely different pot of money and not be included in your retirement asset allocations at all.

Are you worried that you should decrease your emergency fund? One of the problems that EFs have is the paucity of tax sheltered options to keep them in. There's I Bonds and munis and that's about it. If you have the space in your 401k and the cash you might want to work something like this:

Worst case scenario in a crash (discounting a Black Swan, natch) your stocks lose half their value. What some people do is figure out what amount they want to hold in an EF and multiply it by 1.5-2x. They put this into stocks in their taxable space. They hold their true EF in conservative bonds in their tax sheltered space. Should an emergency arise, they sell stock to cover it, then as soon as possible swap that amount of bonds for stock in the 401k. You risk very little doing this and may even be able to take advantage of tax loss harvesting.

If you want specific portfolio advice you can follow the directions here:
http://www.bogleheads.org/forum/viewtopic.php?f=1&t=6212

It can be quite an education!

OP here -- that was helpful, thanks. I have a separate investment account (outside of 401k), where I throw in money; I don’t know what I’m necessarily investing for -- it’s just for the future but need not be for retirement alone. I do view stock market investing for the long term; I was actually buying in 2008 and should have bought more. Because I view it for the long term, I don’t want to be in a position, where I put money into the market and then realize I need it and have to sell it in 6 months to get it out. Of course you can do that with mutual funds, but if you make it a habit of doing that, you get no growth. So what ends up happening is that I only invest what I am absolutely certain I won’t “need” -- and then that ends up being too conservative of a %.

60-80% sounds like a decent target to work my way up to. I definitely feel like I need a financial advisor but am reasonably savvy myself and have not found one yet who is willing to answer my questions or explain why I should do something beyond just saying “that’s how it’s done.”

Two years in an emergency fund is certainly not unreasonable, though I wouldn't recommend any more than that. Make sure it's keeping up with inflation. You can do this with I Bonds, but with yearly limits it will take time to build up.

If you don't have a roth ira yet, realise that any money you put in can be withdrawn penalty free. It's only the earning that are locked up. Invested very conservatively Roths can be a good choice for emergency fund placement.

As far as your other investments go, the important thing is to pick an allocation that won't have you running back to cash as soon as the market has a bobble. Owning funds in a bear environment doesn't make you lose money- selling them does.

At your age anything from 80% to 66% stocks could be appropriate depending on your risk adversity. If you don't have much in the way of retirement savings, and with a hefty emergency fund, I'd personally go 80/20. I didn't blink an eye during 2008, though. If the thought of a crash like that breaks you out in a cold sweat go with 70/30. It's in a bit of a sweet spot, historically speaking: not much more risk than 60/40, not much less return than 80/20.

Again, the important thing is to make a plan and stick to it no matter what the market does. Changes should only be made when something changes in your life- the most common being adding bonds as you age.

Beyond your broad allocation, bogleheads.org is a good site for portfolio advice. They're friendly folk and you won't end up snookered by some anonymous broker making bank every time they churn your account.

i keep 4 months living expenses and the rest in the market. but we both have secure jobs and no foreseeable need to access cash.

Is there a target percentage that you should have invested (meaning stocks or bonds) versus liquid (checking, savings, money market, and CDs which I consider liquid and hardly an investment as the rates are so low). Early 30s. Rent - no mortgage. Bad job stability right now. Separate 401k. I know I keep too much in the bank but I was speaking to a friend in a similar position and she says she keeps only 2 yrs living expenses on hand and everything else is in the market. That seemed excessive to me. Problem for me is - I don't know when I'll need the money -- ie I don't know when I'll buy a house, switch jobs etc so I never know whether I should only put in the market the money that I won't touch for decades or if there is some other way. I know investing in the market and long horizons are what lead to growth so I don't want to be someone who invests nothing and then regrets it in 10 yrs.