NEW YORK (CNN/Money) - I've just pulled all my money out of the stock market and have it sitting in a bank account earning 1 percent. I just got tired of losing money -- $100,000 already. I'm now looking for investments that will be safe, but will earn more than the bank account. I also wouldn't mind a tax shelter. Any suggestions?

-- Bill, Merriam, Kansas

I've got a suggestion all right, but it's not a great "safe" investment that showers you with big returns and shelters your investment earnings from taxes. My suggestion to you is this: Get real, man!

This idea trying to time the market by moving big amounts of money from stocks to cash is nothing but wishful thinking. The sooner you realize that you're not likely to be able to time moves in and out of the market to catch upswings and avoid downturns, the better off you'll be.

Think about it. You didn't pull your money out at the top of the market in early 2000, did you? No. None of us did because we aren't clairvoyant.

And while you're at it, I also suggest you put a stop to this warm and fuzzy but false notion that there are safe investments out there with high returns, and ones that offer tax shelter to boot.

Investing help Rock-solid stocks Top picks of top managers Best funds 2003

Investors operate in the real world. And in the real world there is a distinct relationship between risk and return. If you don't want to take much risk, then you can't expect much return. That's why your savings account is paying a paltry 1 percent.

You can shoot for a higher return and even get some tax shelter by investing in, say, muni bonds, which have recently been yielding about 3.5 to 5 percent depending on their maturity. But you're taking on risk when you do that, the major risk in this case being that if interest rates rise, the market value of those bonds will fall. And if rates rise far enough, the loss in principal could wipe out your interest earnings and more.

Over the years investors have come up with all sorts of ways to deal with the uncertainty of the financial markets and this basic relationship between risk and reward. But in my opinion, the best way to cope with uncertainty and the need to get a decent long-term rate of growth for your money is to create a diversified portfolio that reflects your investing time horizon (how long you plan to have your money invested) and your risk tolerance (how much you can stand to see your portfolio's value jump up and down).

By diversified, I mean a portfolio that contains several different types of stocks or stock funds (growth, value, large and small-cap) and bond funds (taxable and/or tax-exempt) and some cash (money market funds or even your bank account). In general, the longer you intend to have your money invested, the more you should put into the stock portion of your portfolio.

But you've also got to take into account your stomach for volatility. In the 1990s, a lot of us overestimated our appetite for risk. We convinced ourselves we would hold fast in the face of big stock market declines. That was fine when the losses were theoretical. But now that they've come, investors like yourself find that perhaps they're not quite as big risk takers as they thought.

In any event, you've got to re-evaluate your true level of risk tolerance given what's happened in the market over the past three years or so, and then set your mix of stocks, bonds and cash accordingly.

Careful, though. Just as we became too aggressive during the 1990s boom, there's a tendency now to want to avoid risk altogether (as your questions suggests). In reality, though, now that stock prices have been knocked down considerable, today is probably a better time to be accepting the risk of stock investing than back in the late 1990s when everyone was convinced stocks were the place to be.

Basically, what I'm suggesting is that instead of moving into stocks when times seem good and then moving out after stock prices have tanked, the better way of dealing with uncertainty and the natural fear of losing money is to structure a portfolio mix that reflects your investing goals and takes your "angst" about losing money into account -- but still provides an opportunity for your money to grow. Once you've set that mix, you may want to tweak it a little in response to market conditions. But essentially you'll want to stick with that portfolio regardless of what the financial markets are doing.

RELATED ARTICLES Can I rely on just my 401(k)? Money Magazine: Forecast 2003 Gold: Did you miss the rush?

So I suggest you do some serious thinking about what your long-term investing goals are, how long you plan to have your money invested and what kind of volatility you can realistically take.

Then you can create a portfolio that reflects those factors. I can't tell you what that portfolio will look like. But I can tell you that our Asset Allocator tool can provide some guidelines for building a portfolio that, ultimately, will give you a better way of dealing with market risk and uncertainty than moving your money around after the damage has already been done.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "Investing for the Financially Challenged." He can be seen regularly Monday mornings at 7:40 am on CNNfn.