Believe it or not, making conservative moves with your money may be the absolute worst thing for your financial well-being.
So says famed investor Jim Cramer.
Although the "Mad Money" host always advocates informed investing, something he calls homework, he doesn't want you to confuse that with cautious investing.
Cramer thinks far too many people are too cautious, too prudent and too risk-averse. "When you're managing your money, there's a point where all of your prudence becomes recklessness," he said.
The Mad Money host thinks that's particularly true when investing for retirement.
"See, there's a hugely counterintuitive element here. Most people, when they're putting money away for retirement, feel like they shouldn't take on too much risk," Cramer explained.
-------------------------------------------------------------
Read more from Mad Money with Jim Cramer
If the smart money sells, should you sell too?
Buyers beware, cheap stocks aren't always bargains!
Mutual funds are hiding something from you
-------------------------------------------------------------
All too often, people seek out very conservative vehicles for all their retirement money, vehicles such as bonds, money market accounts, stable value funds or other lower risk investments.
However, Cramer says nothing could be worse. If you take that approach there's a good chance you won't have enough money to retire.
"Oh, the money you have will probably be safe, but that's all it will be. It's not enough to get a 3.3 percent return from 3. With that low-rate you're barely going to outpace inflation.
In fact, Cramer says few investments outside stocks have generated enough return to allow you to stop working, someday.
"Therefore, if you are too risk averse you could get yourself into trouble down the road. I call it recklessness masked as prudence.
"The fact is, investing none of your 401(k) or IRA money in stocks is far more likely to jeopardize your financial well-being than investing everything in stocks," he added.
"I know it goes against conventional wisdom, but the conventional wisdom was coined when people had much shorter life spans. We're living longer these days, and if you want to provide for yourself as you grow older, you'll need the extra upside from stocks," Cramer said.
That's not to say Cramer thinks none of your money belongs in bonds; it's just he doesn't want to see all of it in bonds, ever.
"My rule of thumb is that you should keep 10 to 20 percent of your retirement portfolio in bonds when you're in your 30's. Then in your 40's you can up it to 20 to 30 percent of your retirement portfolio in bonds. In your 50's its 30 to 40 percent, and from age 60 until you retire, you can put as much as 40 to 50 percent bonds. This may sound extremely aggressive, but it's the best way to generate the return you need to retire the way you want to, when you want to. And once you retire you should still own some stocks. I think they should be about a third of your portfolio at that point."
Call Cramer: 1-800-743-CNBC
Questions for Cramer? madmoney@cnbc.com
Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com