Ask These Five Questions Before Putting Your Money to Work

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Stocks? Bonds? Marilyn Monroe memorabilia?

Investors are always trying to figure out what to buy now. But today, more than ever, it's tough to tell. Treasury bonds have been on a roll for more than three years. Stocks suffered during most of that time, but they've recently rallied hard. The same goes for corporate and junk bonds.

Basically, everything's up. And not much looks like a screaming bargain.

But if you have money you need to put to work, you still have to decide what to do with it. These five questions should help point you in the right direction.

How Old Are You? How Soon Do You Need the Money?

Your age and your needs are the most important considerations when deciding where to invest. If you've got cash sitting on the sidelines that you know you'll need in a year or two, that's where it should stay -- in cash.

Money that's going to go toward a down payment on a home or a college-tuition payment in a matter of months should be kept in the safest place possible. And even though interest rates are at rock-bottom levels, a money market fund is still the most secure place to invest. You can just try to find a money market fund or account with the best possible rate.

What Do You Already Own? What Have You Been Buying?

The main goal when you're putting together an investment portfolio is to make money, right? But another key consideration is creating balance -- assembling a collection of assets that won't move in the same direction at the same time.

If you have a long time to invest, you can keep the majority of your money in stocks, maybe 80% of your portfolio. But that allocation should be spread across large-company stocks, small-company stocks and international. And the remaining 20% can be in bonds and cash.