Go with a one-stop shop. A target-date fund couldn't be easier. Choose a fund with a target date that matches your goal -- retirement or college, for example. The fund shifts to a more conservative mix of stocks and bonds as the date approaches. So if you're investing for a retirement 30 years from now, you might choose T. Rowe Price Retirement 2040 (symbol TRRDX). We like the T. Rowe Price funds because of their low fees and healthy allocation to stocks.

Set it and forget it. With just three broad-based index funds, you can create a low-cost portfolio that requires little oversight. Put 75% of your stock investments in Vanguard Total Stock Market (VTSMX), which essentially lets you buy the entire U.S. stock market. Place the rest of your stock allocation in Vanguard Total International Stock (VGTSX), which covers the rest of the world. If youÕre investing in a tax-deferred retirement account, use Vanguard Total Bond Market (VBMFX) for the bond portion of your portfolio. In a taxable account, go with Vanguard Intermediate-Term Tax Exempt (VWITX), which is not an index fund.

Do it yourself. Choosing a group of actively managed funds may seem daunting, but don't be intimidated. Consult the model portfolios at kiplinger.com/links/portfolios.

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