Forget Returns - Focus on What You Can Control

Despite what anyone might tell you, there is no way to control which way the market is going, or what stocks are going to do. Crystal balls went out many centuries ago. But, there are two things that you can control: How much you save and how much risk you take.

Increase Your Savings

It may easier said than done for many people, but if you focus on percentage benchmarks you'll find yourself socking more away each month, quarter or year. If you need to start out low, set a low goal, like 3% of your income. Then, as you reduce expenditures or increase your income, bump it incrementally by one percentage point. By the time you're forty years old, you should be saving at least 10% of your income - more if you got started late.

Reduce Your Risk

That doesn't mean taking your money out of the stock market. Risk reduction entails finding the proper allocation and balance in your overall investment portfolio so that all of the risks are counter balanced. For instance, to minimize market risk - the risk of loss due to stock market declines - add an investment that moves opposite the stock market, such as bonds. If you don't like volatility in your stock mutual funds, add mutual funds that invest heavily in dividend stocks which can act as stabilizers. And, to counter inflation risk, add funds that invest in precious metals. The biggest risk many people face is longevity risk - the risk of outliving their income - so add investments such as annuities that will guarantee your income for life.