Do you have the right stock and bond mix?

Once you've given up the notion that you can pick the next hot mutual fund, you can focus on the real key to investing for retirement. And that's creating a blend of stocks and bonds aggressive enough to generate the returns you need but not so risky that your retirement savings will be decimated by market meltdowns.

When you're younger and have more time to recover from short-term setbacks, you can afford to tilt your mix toward stocks. As you age and become more vulnerable to losses, gradually shift toward bonds. It's pretty simple.

If you don't have the time or inclination to do this yourself, go with an increasingly popular option known as a target-date retirement fund. You simply choose a fund with a date that roughly corresponds to the year you plan to retire - say, the 2035 fund if you're in your early forties - and you get a fully diversified portfolio suitable for someone your age. Many large fund firms, including Fidelity, T. Rowe Price and Vanguard, offer these options, while 85% of 401(k)s at large companies offer or plan to offer similar funds.

Are you holding the line on fees?

You can't predict investment returns, but you can predict how much you'll lose to high fees. That's why you should stick to funds with low annual expenses. There are no guarantees, of course, but funds with lower costs tend to outperform peers that operate with the drag of higher fees.

Look up how much the funds you own (or want to buy) charge by punching in the fund ticker in the Get-Quotes box above. As a general guideline, you shouldn't be paying more than 1% a year for a U.S. diversified stock fund or 0.80% for a bond fund.

You can easily reap this low-fee advantage by investing in index funds. Most charge less than half of the 1% to 1.5% that's common for regular mutual funds, and some charge as little as 0.07% a year - just $7 a year for a $10,000 investment.

Do you ignore hot investing trends?

Many people think that there's one "right" investment out there that will solve all their problems. You know: If only I'd bought the ING Russia Fund that returned 68% last year, I'd be well on my way to living large in retirement.

But that's exactly the wrong approach. At best, searching for the perfect fund is a big waste of time. Unless you're clairvoyant, you can't know which fund will come out on top - returns are too unpredictable.

And at worst, engaging in a vain quest for a winner can lead to the classic and costly mistake of getting in at the peak. Funds that have been riding the tops of the performance charts are often ready to tank. Buying them is dangerous.

Do you rebalance once a year?

Over time, some of your investments may soar while others lose money. Result: The blend of assets you put so much thought into will inevitably be thrown out of whack.

So to stay on track for retirement, periodically recalculate your mix and restore your portfolio to its appropriate balance by selling shares of winners and plowing the proceeds into losers. Ideally, you should set a day every year to do this - your birthday, an anniversary or any other date you will remember. Of course, a target-retirement fund does this work for you automatically.

The beauty of rebalancing is that it forces you to do what investors so often have trouble with - buy low and sell high. Annual rebalancing may even be able to reduce your portfolio's risk and boost its return. Do it regularly and you can feel confident you're doing what's "right" with your investments.