Investing money to win means earning higher returns when the sun shines and avoiding heavy losses when the investment climate darkens. Here’s how to invest money and make money with only moderate risk.

To keep your investment strategy simple use mutual funds as your investing vehicle. You don’t need to play the stock market or pick individual bonds and other investments this way. Mutual funds pick stocks and bonds for you and do the money management. You just choose which ones you want to invest money in.

Invest in all four asset classes to mellow out Investment climate your portfolio risk. This will give you a well-diversified and balanced investment portfolio. The four asset classes: stocks, bonds, alternative investments and cash equivalents (safe and liquid investments).

Invest about 40% of your total investment assets in U.S. stock funds. This will be your primary growth engine … where you really make money when the sun shines.

Put about 30% in bond funds. The advantage here is that you are investing money in bonds for higher income or interest in the form of dividends. Don’t worry about picking your own bonds; they do the money management for you.

To add extra balance to your portfolio, invest about 20% in a variety of other (alternative investment) funds. Here we include specialty funds like real estate, natural resources, and gold funds. Also consider investing money in international or foreign stock funds. Alternative investments like these can make money for you when U.S. stocks are experiencing stormy weather.

For safety and flexibility put the remainder, 10% to 20%, in a money market fund. When you invest money here you invest for safety and interest in the form of dividends.

The above percentages represent your asset allocation. You may want to tweak them to better suit your risk tolerance. For example, if you want to be more conservative cut back on your asset allocation to U.S. stocks and increase the percent you put in bonds and the money market fund. Remember, your asset allocation percentages must total 100%.

Do not ignore your investment portfolio. Review your account every time you get a statement in the mail. Keep your asset allocation on track. For example, if your allocation to stock funds hits 50% vs. the 40% you started with, that means that stocks did well and its time to cut back. Move money from your stock funds to the others to get back to your original asset allocation.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.