You've heard the expression "never put all of your eggs in one basket"?  Well it's especially true  when it comes to investing.  The smartest way to balance risk is by spreading your assets across a spectrum of higher-risk to low-risk investments.

For as long as we can remember, financial "experts" have been touting model portfolios that supposedly show you how to invest for each stage of your life.

Well, you're not going to see model portfolios here at Dolans.com!

We HATE model-portfolio percentages. We believe they get too many people in trouble with "one size fits all allocations." The standard model portfolio, devised by a broker or financial planner, will tell you that when you're young you can take plenty of risk and when you're close to retirement you can't.

But that's not always the case. Many young couples have mortgages and children who will need secure funds for their education. Many young–and middle-aged–professionals have no job security. Many senior citizens have tons of disposable assets, the leisure time to pick stocks, and absolutely no worry about being downsized onto an unemployment line.

The point is, your financial situation and goals are unique and your investing strategy should be too!

How Do You Allocate Your Portfolio?

We don't do model portfolios, but here are some general guidelines to consider for your situation:

• If you're young, single and just building a nest egg, put some money into growth stocks but no more than half of your "investable" funds. Put the rest into an investment that will be there when you need it - like when you want to buy a house or have children - such as tax-free bonds, and some in a highly liquid money market account. (Actually, most people under the age of 25 don't invest, but if you can, you should.)
• Single parents probably can't afford to lose money in this case, so put most of your money into Treasury securities, high-yield bonds, and money market funds, with a smaller portion in growth and income mutual funds or dividend-oriented stocks.
• When your children are growing up and even after they've left you with an empty nest, you should aim to preserve your wealth with conservative investments, but walk on the wild side with 5% to 20% in growth stocks or mutual funds.

Of course, any strategy depends very much on your income, your dependents and your commitments. The less you have, the less you can afford to lose.

Dolan Smart Money Move: One investment every individual and couple should have is a retirement account. If you have a 401(k) take full advantage of it.  If you are lucky enough to have an employer who provides 401(k) matching contributions, maximize this free money and contribute the maximum if you can.

If you don't have a company sponsored 401(k) plan, contribute as much as you can to a Roth IRA, which shelters your investment earnings from taxes, although not your contributions. In general, if your income is below $95,000 for individuals or $150,000 for couples, you can contribute up to $5,000 to your Roth IRA. We recommend you take full advantage. Learn more about IRAs here.

Related links:

• The Retirement Tool You Absolutely Need!
• Don't Lose Your Shirt in These Investments
• The Skinny on ETFs