[gvibes]

Although you are awfully close to retirement (on an investment horizon view), I think you should at least have some equities in your portfolio (don't mean to step on your toes, GeorgeF) unless you have an unnaturally low tolerance for risk. Your risk tolerance seems low, so 30-40% equities would seem like a good number. Normally, I would say 50 would be good number.

Set up an asset allocation, and stick to it.

The rest of GeorgeF's discussion is good - you should always have a wide variety of securities, to reduce variance. If you have money in a 401(k) or IRA (i.e. tax-free), then I would suggest holding your bonds in those funds - you are generally better off holding taxable bonds in tax-protected accounts than stock.

Stock - Vanguard is sweet. Vanguard total stock market is good place to start (VTSMX). If you believe that the value and small-cap premiums are real (I buy the research), you could do something like a four way split in equities (large(S&P 500)/large value(VIVAX)/small(NAESX)/small value(VISVX)). You may want to add the REIT index to further reduce variance (VGSIX). I think the REIT index may expose you to a decent amount of tax liability. Maybe add the emerging markets index as well. Keep in mind, that the more different funds you use, the more your tax exposure, as you rebalance your asset allocation.


Do the following things:
1. Read Burton Malkiel's "A Random Walk Down Wall Street."
2. Start visiting diehards.org. Learn.
3. Don't listen to playerfl.
Follow the above, and you should safely expect cumulative returns of (my guess) about 6% over the next 15 years.

EDIT: I think Ray Zee may have overstated the issue a little bit. Yes, pay off your 12.9% (or 17.9%) credit cards. But don't pay off your 1.9% car loan. Don't pay off your 5.7% mortgage (yes ER will likely be right around 6%, but you get the favorable tax treatment).

EDIT #2: I would be very leary of stock brokers in general. There are some good ones, but mostly are a bunch of crooks (churn&burn).