By Judith Ward

The journey we've been on for the last few years has been as challenging as that long road trip with the kids—testing our nerves while we hoped the market would just cooperate.

While some investors have stuck with their long-term strategy and benefited from the dramatic improvement in asset values since March 2009, others may be waiting for the "right time" to get back into the stock market or at least adopt a more appropriate asset mix for their portfolios. Recent studies suggest that as asset values increase, investors may be gaining more confidence and willingness to ease back into the market. Others may be waiting until they've recouped all of what they lost—which could take quite some time if their portfolios are heavily invested in low-risk, low-yielding fixed income investments.

We suggest that investors who are nearing or in retirement maintain a healthy balance of stock and bond exposure in their portfolios. The good news: A hypothetical diversified portfolio that is about evenly balanced between stocks and bonds would be at or above the previous peaks reached in October 2007.

Investors who have a longer retirement planning horizon are getting closer to the peak of October 2007. Portfolio C (shown below), for example, a portfolio of 85% stocks and 15% bonds might be appropriate for investors who are about 20 years away from retirement. If an investor started with $100,000 on 10/31/07 in this hypothetical portfolio, that value would be about $92,529 as of the end of December 2010.

However, as many investors have experienced, making regular contributions to retirement accounts has helped to increase their balances over time. One bonus is that during a down market, contributing a fixed dollar amount on a regular basis allows you to purchase more shares, which may increase in value during the recovery.

It's been quite a bumpy ride for most investors, but following just a few simple steps may help you reach your retirement goals:

(1) Your portfolio. Make sure you have a properly diversified portfolio with an appropriate mix of stock and bond funds for your investment horizon that you will be able to stick with through the market's ups and downs. Use the Asset Allocation Planner to determine an appropriate strategy. Diversification cannot assure a profit or protect against loss in a down market.

(2) Contribute on a regular basis. We suggest contributing 15% or more (including any company contributions) of your salary to your company-sponsored retirement plan and/or Traditional or Roth IRA(s). If 15% is not practical, at least try to increase your contribution amount each year for several years. Contribute quickly and easily to your IRA, using IRA AutoMax.

(3) Resist the temptation to deviate from your long-term strategy. Revisit your plan once a year to rebalance to your allocation targets. Reviewing a portfolio too often could lead to impulsive decisions that could harm, rather than help, your strategy over the long term. Our Retirement Funds are professionally rebalanced to retain an appropriate asset allocation.

The principal value of the Retirement Funds is not guaranteed at any time, including at or after the target date, which is the approximate date when investors turn age 65. The funds invest in a broad range of underlying mutual funds that include stocks, bonds, and short-term investments and are subject to the risks of different areas of the market. The funds emphasize potential capital appreciation during the early phases of retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus more on income and principal stability during retirement. The funds maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility.

All charts shown are for illustrative purposes only and do not represent the performance of any particular investment. It is not possible to invest directly in an index. Past performance cannot guarantee future results.