However, often things do not work out as we expect. Contemplating the terminal diagnoses we all share, it occurred to me, not for the first time, that widows or widowers of mates who were the successful and primary managers of a couple's nest egg may face special challenges. Just when so much else may be on their minds, they need to also learn quickly to deal with the estate finances and to handle portfolios of perhaps varied and unfamiliar assets.

How then should the assets be allocated? Should one go for safety first? Ought assets all be sold and put into Certificates of Deposit?

To the novice, these and dozens of other considerations may be almost overwhelming, especially as one is likely still grieving and so usually not in the best place for objective decision making.

• If one's partner was good at managing the family savings and investments, then chances are the resulting portfolio or nest egg can continue awhile on its own, without much or any additional fine tuning for the time being.

• There is little tax advantage to selling assets which, at one's partner's death or subsequently, are already for the most part trading at a loss, as many are at this time. One can claim just $3000 in net stock or mutual fund losses against one's income in any particular year. The losses to one's portfolio in 2008 probably well exceed that, if there was any substantial nest egg before this past September and October.

• In fact, the losses in general have been so severe in just the past three months that it may take years to recoup them. One might think that means we should sell stocks now lest they drop still further in value. There is a small chance that would later turn out to have been good advice, but in almost every case when the markets have been down this much they have rebounded significantly over the next year or two, certainly within the following 5-10 years, and especially if one includes the value added of stock dividends that would be paid year after year if one simply holds the assets.

• So, for the next year or so at least, in the untimely, and hopefully also unlikely, event of one's less equities market challenged spouse kicking the bucket in that period, it would seem best to either just sit tight, waiting for one's securities to go up in value by a substantial amount, say 100% or more, or to even add to stock or stock mutual fund holdings while prices are still unusually low, thus assuring the first part of the classic investing tip, to "buy low, and sell high."

• Once one does decide to sell some or all of the portfolio someone else had managed, one will need to decide, actively or by default, what to do with the proceeds left after paying off any credit card, medical bill, or other short-term debts. Of course, one might just leave them in a bank savings or a brokerage money market account, or else in some other reasonably stable and safe financial instrument (that being one default option, for instance).

• But it may be more rewarding in the long-term to allocate the assets among different asset classes. Brokerages and mutual fund families, Charles Schwab and Vanguard for example, make this step relatively easy and inexpensive. One can readily save 50% or even much more on fees and commissions by merely using such companies for one's investing rather than full service brokers and their representatives.

• If one does not wish to research individual stocks, stock mutual funds are an excellent way to invest to keep ahead of inflation for the long-term. Whatever one's chosen level of risk, partly dependent on one's age and other resources, it is a good idea to supplement stocks or stock mutual funds (equities) with bond funds as well as cash equivalent assets (to cover one's expenses in the short-term plus in an emergency).

• I personally like a 10/30/60% allocation for this reserves, bond, equity mix, respectively, but each person can determine the best allocation for him- or herself. Then one may adjust (or rebalance) the holdings about once a year or when equities have fallen or risen by 10% or more, thus keeping them within a reasonable tolerance of the intended allocation.

• Companies that have a wide variety of mutual funds available at low cost can be used for such a mix, and they are then easily exchanged online or via an infrequent telephone call or two.

*This table is used merely for illustration. Other fund families or brokerages may have portfolio options as appropriate for an investor as this one. Other Vanguard portfolios could be better for a particular person's needs. We have no fiduciary relationship with Vanguard.

**Net of fees, through 11/30/08

***Note that the 10-year period just ended in November, 2008 is the worst, or close to the worst, since the Great Depression. Normally, a well allocated 10/30/60% reserves/bond/stock portfolio would be relatively stable and return about 7.0% a year on average, while a 100% S&P 500 Index Fund allocation would be relatively volatile and return about 10% a year on average.

• Let me say too that one should get good advice. It may be best, in fact, to talk with several people, preferably of different viewpoints on monetary issues, before making up one's mind just how to proceed. There will always be folks (like me, for example!) who love to give suggestions, some just because it is a hobby, others for profit, but their agendas may or may not match one's own. They might, for instance, want to steer a person in the direction of a very conservative set of investments, though with extra safety one usually gives up some potential portfolio growth. On the other hand, it could just as well happen that one's preference is for only the surest approach to investing. A 10% allocation in stock mutual funds might seem too risky for such a person. Yet his or her broker or advisor might be attempting to steer the individual into speculative growth funds, emerging markets investments, commodities, margin debt investing, oil exploration partnerships, options, etc.

• Finally, I believe anytime one is new to investing it is well to get monetary guidance from one or more well recommended and trusted financial consultants. A good one, who also understands and works with a person's risk preferences, can truly be worth thousands, even hundreds of thousands of dollars to one's long-term financial security. But a bad one can be much worse for one's financial well-being than adopting a do-it-yourself approach, so it is best to be at least as careful in selecting a monetary advisor as one would be in picking a long-term portfolio of mutual funds.

(Disclosure statement: Larry and Val have holdings in some of the suggested assets but do not "make a market" in any of them and do not derive any direct benefit from recommending them, except perhaps for a bit of smug self-satisfaction.)