NEW YORK (CNN/Money) - As far as you're concerned, anyone who tells you it's smart to be in stocks these days is smoking something. That, or they're hopelessly blind to reality as you see it.

After all, the bond and money market funds in your 401(k) are in the black, thank you very much. So what if only barely? Most of your friends are crying themselves a red river over their diversified stock portfolios.

Fair enough. Who can blame you for seeking a port in the storm? But making your bed there -- or planning a return to the sea of stocks only after things have "calmed down" -- can put you at greater risk long-term than you think.

Here are three mistakes you might be tempted to make when the going gets rough.

Stocks have been giving you ulcers. So much so you're ready to kiss the asset class goodbye, lock in your losses, and throw the majority of your nest egg into cash.

RELATED TOOLS • Retirement Planner • Fix Your Mix Asset Allocator

That's fine, so long as you're willing to save considerably more than you planned.

Take a 30-year-old who wants to retire at age 65 with an inflation-adjusted, pre-tax retirement income of $70,000 a year, including Social Security benefits. Spooked by the punishing performance of stocks recently, she's chosen to put 80 percent of her 401(k) balance in a money market fund and just 20 percent in an S&P 500 Index fund. She plans to continue contributing $11,000 a year on an inflation-adjusted basis.

Assuming she has a $50,000 balance today, she stands only an 11 percent chance of meeting her goal, according to calculations by Financial Engines. The company, an investment advisory service for participants of employer-sponsored retirement plans, runs Monte Carlo simulations on portfolios to calculate the probability of achieving a desired outcome.

According to Financial Engines, our 30-year-old investor would need to save an additional $6,800 a year in after-tax money to achieve a 74 percent chance of meeting or exceeding her goal. Boosting her stock allocation to 81 percent would give her that same chance for success without the extra savings.

OK, maybe the money market's not doing it for you. You want a higher return, but you can't stomach the risks stocks pose. So you figure a bond-dominated portfolio is your best bet.

RELATED ARTICLES • Risky business • Will you have enough to retire? • 401(k): Keep foot on the gas • Got Bear Market Depressive Syndrome? • Stocks: What can you believe?

Bonds often carry less risk than stocks. A portfolio with 80 percent government bonds and 20 percent S&P 500 stocks invested between August 1970 and August 2002 carried half the risk of a portfolio with 80 percent stocks and 20 percent bonds, according to Ibbotson Associates.

But that diminished risk also yielded a lower return. During the 32-year period, the bond-dominated portfolio averaged an annual compounded return of 9.2 percent. That's two percentage points less than the compounded 11.2 percent return averaged by the stock-dominated portfolio.

That may not seem like much, but it would have made a big difference to your bottom line. If you had invested $10,000 in each of those portfolios in August 1970 and never contributed another dime until August of this year, you would have had nearly $130,000 less with the bond-dominated portfolio.

And don't assume you can never lose money with bonds, at least not in a given year. Certainly, if you buy a government bond and hold it to maturity, you're guaranteed the principal plus some return.

But the same can't be said of a corporate bond, which runs a higher risk of default. And if you're like many individual investors, your exposure to bonds comes through mutual funds, which can lose money since they typically trade bond issues and don't hold them to maturity. Therefore they are subject to price and interest rate volatility, as well as credit risk. What's more, your return always will be reduced somewhat by the annual fund expenses you pay.

Looking ahead, analysts see a more muted performance in bonds, in part because interest rates are currently near historic lows, which means the upside potential for bond prices -- which move in the opposite direction of interest rates -- is limited. So as rates rise, prices will fall, and that's likely to tamp down bond fund returns.

Maybe you're not permanently turned off by stocks, just temporarily allergic. You figure you'll know when the time is right to get back in and in the meantime you're parking your money in bonds and cash.

All the best to you. Timing the market is a fool's errand, experts say. And standing on the sidelines indefinitely can be costly.

Maybe you're waiting for certain conditions before you jump in -- say, three months of solid performance on the Dow or Nasdaq. If indeed those three months prove to be the beginning of another bull market, you may have missed a big opportunity, said Peter Di Teresa, a senior fund analyst at Morningstar. The start of a bull market is typically the time when some of the best gains are made.

But there are other best-gain days as well. Trouble is, no one knows when they're going to be except in retrospect. A study conducted by Federated Investors found that investors who kept their money in the S&P 500 between 1982 and 2001 earned an annualized return of 15.1 percent. Those who missed the 10 best trading days during that period had returns of 12.2 percent and those who missed the 50 best days only earned 5.4 percent.

That's why experts recommend dollar-cost averaging -- investing small amounts in stocks at regular intervals regardless of the market's behavior. By doing so, you buy shares at their lows, their highs, and everything in between, lowering your average cost overall. What's more, you position yourself to profit from the runup in those shares you bought on sale.

Now, that's not to say you should bank your entire financial fate on stocks. Hardly. Certified financial planner Steven Kaye, a self-professed nervous Nellie who plays the market conservatively, always advises his clients that any money they need in the next five-to-eight years should be in bonds and cash. For truly conservative investors, that number goes up to 10 years, he said.

And any investing expert will tell you to keep your total portfolio well-diversified across stocks, bonds and cash. (For help figuring out the best mix for you given your time horizon and risk tolerance, try our Asset Allocator.)

But for people with 25 years or more to retirement, "It's a perfect environment for someone to be dollar-cost averaging. One-hundred percent of their 401(k) money should be going into stocks. You want the market to fall. You just want it to be high in 30 years," Kaye said.

Of course, there's no guarantee the bottom won't fall out of stocks forever, making a mockery of all historical investing precedents to date. But there's also no guarantee you won't lose your way home tomorrow, either. Chances are good, however, that you won't.

Likewise, when it comes to stock investing over the long term, Kaye said, chances are "if you stay on the train, you'll get to the station."