Use these guidelines to diversify your investments, reduce your risk and meet your savings goals.

Editor’s note: This article is adapted from Kiplinger’s Retirement Planning 2007 guide. Order your copy today .

When you hear the word hobby, you probably think of typical pastimes, such as photography, gardening and tennis. Not Jeff Blades. The St. Louis resident would rather spend his free time training for the ultimate challenge: Iron Distance triathlons. These races include a 2.4-mile swim, a 112-mile bicycle race and a 26.2-mile marathon — back to back to back. Blades, who has completed 70 triathlons (and is signed up for several more this year), says pacing is the secret. Simply put, short-term thinkers do not survive the grueling 140.6 miles, he says.

Blades is a zealot when it comes to diversification, and he maintains a careful balance among funds that target various investing styles, market sectors and companies of different sizes. His investments are a mix of index funds and actively managed mutual funds, with a chunk of real-estate holdings and a slice of individual stocks.

At 46, Blades isn’t thinking of retiring anytime soon. I try not to equate retirement with a specific dollar threshold, so I don’t have a predetermined age or asset level, he says. My goal is to double my assets every five years. He’s already met that goal several times over the years, and his portfolio continues to grow at a steady clip.

In Blades’s investing strategy, the funds he picks and the way he mixes them are of equal importance. Before you begin experimenting with funds in your own investment recipe, you’ll need to think about your investment goals, time horizon and tolerance for risk. You don’t just decide to run a marathon, says Keith Newcomb, a Nashville financial planner. You must prepare and assess the landscape. The single most important thing to do is lay the foundation before you start picking your investments.

This article will give you the tools to construct your own portfolio, as well as suggest well-diversified model portfolios you can adopt as your own. Each of our models contains one portfolio of actively managed funds and one made up of lower-cost index funds.

Why diversify?

Such shifts in style are largely unpredictable, so you won’t have steady growth if you invest in only one type of stock. The more diversified, the smoother and safer the portfolio will be on the way from point A to point B, says Newcomb. While some funds may fluctuate wildly, the basket is going to fluctuate less overall.