There is no reason to stick with index funds alone. I just posted a long list of funds that have out-performed the S&P 500.

http://boards.fool.com/Message.asp?mid=25969833

The list deserves further examination, and of course your 401K choices are limited.

You say selecting individual stocks to hold for the long term. Great if you can do it, but every time you buy a stock you should know the circumstances under which you should sell it. Enron and World Com were supposed to be long term holds, according to some brokers.

So you need an understanding of how to trade. I made a lot of money on stocks like SUNW, (now the symbol is JAVA) but only because I sold some place in the low 60's (split adjusted). I just wish I had shorted it.

The same is true of mutual funds - re-evaluate at least every 6 months.