I want to invest in one simple mutual fund.

Solution: The fund you should pick depends on your age and any other investments you may have. If you’re just starting out, consider "life-cycle" funds offered by Fidelity, Vanguard and T. Rowe Price. In these funds, your money is spread among different kinds of investments so you are properly diversified. You determine the year you expect to retire or otherwise need the money -- and then choose a fund accordingly.

For example, say you want to retire in 2035. There's a Fidelity Freedom 2035 fund, which gives you pieces of about 15 Fidelity stock funds and a few bond funds. About 85% of the money will go into stocks because the fund is set up for you to invest for about 30 years. But if you buy Fidelity Freedom 2020, which suggests you plan to retire 15 years sooner, you’ll get about 30% in bonds.

The main difference among target-retirement funds is that Vanguard invests your money in indexes, while Fidelity and T. Rowe Price usually assign your money to their actively-managed funds.

--Jeffrey Kosnett