Hi Nebraska1 -

Thanks for your question. Mutual funds are a great way to invest in the market because they allow you to buy a whole basket of stocks or bonds (or both) that was put together by an expert. Buy one mutual fund and you're immediately invested in a lot of different companies...buy one stock and all your money is riding on that one company.

But you usually need more than one mutual fund in your portfolio. You probably need a few different stock funds and at least one bond fund. The longer your investment horizon and the more comfortable you are with risk then the bigger your allocation to stocks should be. If you want to use your cash in two to five years then you should conservatively invest your money. Most of it should be in bonds and cash. If you're investing for the long haul - say 30 years - then most of your money should be stock funds. Here's an article with advice on how to build a long-term portfolio: http://blog.filife.com/retirement-advice-for-my-friends-peers/

The markets are a little wild right now. But yes - you should probably keep investing. If your State Farm Fund is down and you sell it - you'll lock in your loss. (But as I said above, make sure that your State Farm Fund is part of a diversified, long-term investment plan.) Read Dave's recent article about what to do with your investments now here: http://blog.filife.com/stay-calm-when-others-panic/

Pretty soon, we'll be publishing a longer guide on mutual funds and asset allocation. Stay tuned...