The Dow has jumped the psychological hurdle of 10,000, the stock market is up about 60 percent since the beginning of the year, and yet regular-Joe investors are still dragging their heels. Many small investors have been sitting out the rally, and a recent Charles Schwab survey found that some 60 percent of mutual fund investors haven't made changes to their portfolio since the stock market began to decline two years ago.

Despite the far-reaching damage of the financial crisis, fewer than half of those surveyed by Schwab say they've become more knowledgeable about their investments over the past two years. That's not surprising, given that two thirds of investors don't read the investing information provided by their plan, according to J.P. Morgan Retirement Plan Services. Inertia isn't the only force at work, says Peter Crawford, senior vice president for investment management service at Schwab. "It's a scary world of investing for some. There's a lot choices, a lot of complexity, a lot of unfamiliar terms," he says. "Part of it is fear—people don't want to open a statement and see a bunch of red ink." Here are a few tips to help you wade back into the market.

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Survey the damage. In a down market, checking your account statement is like stepping on a scale. The good news is that your portfolio very likely looks a lot better than it did six months ago. Investors should check in with their investments every now and then to make sure their allocations haven't shifted dramatically. Don't just look at stocks versus bonds—see how your stock portfolio is currently divvied up between U.S. and international stocks, for example. Chris McDermott, vice president of retirement and financial planning at Fidelity, recommends zeroing in on asset classes that are more than 10 percent over or under their original allocation. Opinions vary on how often investors should actually rebalance, which involves buying and selling assets (or just deploying new money to underrepresented asset classes). Some advisers say quarterly; others say annually. Morningstar found that investors who rebalanced every 18 months realized many of the same benefits as those who rebalanced more frequently. Still, if you haven't checked in recently, chances are that your allocations have drifted.

Size up performance. It may be time to consider whether your individual funds are worth holding on to. See if they're beginning to make up ground lost during 2008. Also compare their performance with peers over the past one, three, five, and 10 years (if applicable). If a fund has been lagging other funds in its asset class, find out why. Has there been a change in management or strategy? A handful of bad stock bets? It's important to determine whether lousy performance is the fault of the fund or the market. If your fund's lost its mojo, consider a swap.

Revisit the risk question. Sure, you should reconsider your ability to stomach the market's swings. But Neal Ringquist, president of Advisor Software in Lafayette, Calif., argues that your capacity for risk is even more important. In other words, he says, "it's how much you can afford to take, not how much you can psychologically bear. . . . How much risk can you take, given your goals and household balance sheet?" For example, a near retiree whose assets are tied up in a 2015 target-date fund may think he or she is on track with a 55 or 60 percent allocation to stocks. But target-date funds don't take into account an individual's cash-flow needs, Ringquist says. "Many investors are going to make trade-offs. . . . It's more about 'I have these goals; am I going to meet them, given my current set of resources? What's my margin of safety, and how much risk can I bear?' " he says.

Make the leap. Despite the market's roaring rally, it's still an opportune time to invest, says Don Humphreys, president of Voyager Wealth Management in Harrington Park, N.J. "Obviously, a lot depends on your time horizon—assuming it's not just a couple of months or a year," he says. "Sure, the market's rallied a lot, but for an investor looking at a five-to-10-year investment horizon, I believe stocks look attractive. . . . We're still down a lot, and we haven't come close to recovering it all."