ARROYO GRANDE, Calif. — Despite hundreds of choices on the supermarket aisles, I stick with the same breakfast cereal I’ve been eating for more than 50 years — oatmeal.

My guess is that your cereal-eating habits, like mine, would tell us a lot about how you invest in mutual funds. I’m a keep-it-simple guy. To me, reading data on fund prospectuses in the mutual funds supermarket would be about as nutritious as reading the labels on a box of Frosted Flakes, Puffed Wheat or Cap’n Crunch.

Maybe you’re like me. Who needs 10,000 funds? Ten, six, even one is enough. While too many choices make people anxious, I also know investors want lots of choices. That’s the American way, right? Like their cereals, they want to explore, search and experiment.

Walk down the aisle of your 401(k) plan and you’ll see what I mean. Fund companies managing corporate 401(k) plans are less effective than cereal manufacturers in satisfying our human tastes.

If you want lots of choice, you’ll probably be disappointed — too limited or never enough. But if you want to keep it simple like me, it’s also tough to find the right ones to fit your keep-it-simple "oatmeal" tastes. So today, I’ve got a few clues to help folks at both ends of what I call the "cereal-box" spectrum of investor psychology.

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MONOPOLIES LIMITED YOUR OPTIONS

A few short years ago, the main criticism of 401(k) plans was that the "plan managers" (banks like Wells Fargo or fund companies like Fidelity, Vanguard and T. Rowe Price) offered very limited menus, usually a dozen or less, and only their own proprietary funds.

You knew there were better funds out there in the vast universe of mutual funds, but the attitude of the plan manager and the "plan sponsor" (your company) could be wrapped up as: "take it or leave it." Your company gave its plan manager a monopoly that wasn’t the best deal for employees.

Back then, a few plan managers did offer employees access to their "fund supermarket," a network of funds from other fund families who pay to get in the network list. You’d get some more funds, but you either paid an extra fee or there was some sort of quiet "rebate" from the selected fund companies paid to your plan manager.

Some plans also offered employees "self-directed brokerage accounts" as an add-on option. You got unlimited access to all markets, but you paid an annual fee.

SECRETS OF THE ‘TROJAN HORSE’

A few years ago, I learned about a hush-hush "Trojan Horse" option from the 401(k) experts at Schwab. Turns out there was a way to sneak several Schwab or Vanguard or T. Rowe Price funds into a plan managed by Fidelity, for example. And you didn’t have to pay extra.

And it’s so easy! A simple technology called "Open-Architecture" was available all along that gives any employee in any 401(k) plan in any American company a way to consolidate all their accounts in one location and also access to all financial markets and every other fund company. But most companies didn’t know about it.

So why the secrecy? Because by keeping the hush-hush Open-Architecture option a secret, a plan manager could maintain its monopolistic hold over a company’s 401(k) plan and its employees. In fact, several sources tell me the competition to get lucrative 401(k) plan-management contracts is so intense that not only do very few American workers know about the Open-Architecture option, most corporate executives who pick and hire a plan manager also are the dark.

Secret goes public

Today, though, some fund industry leaders are beating the drum: "Open Architecture provides investors with centralized access to products from many plan sponsors," writes Robert Pozen, chairman of Boston-based MFS Funds, in his book, "The Mutual Fund Business."

This former vice-chairman of Fidelity Funds calls this "one of the most powerful forces in the mutual fund industry" because it makes it "hard for any single fund complex to monopolize customers," while better serving investors. Unfortunately, monopolies die hard, so the O-A option is still not as well-known as it should be among employees and corporate executives managing their 401(k) plans.

So here’s my suggestion: If all this is new to you, and you’d like more choices in your 401(k) plan, walk into your boss’s office tomorrow and suggest the company get out of the dark ages of technology. Open-Architecture’s been around for a while. It’s about time fund companies stop hiding it from investors.

Targeted lifestyle solutions

The other end of the fund choice spectrum is simple: What if you don’t want more choices? Many investors simply don’t like having to sort through lots of choices; they’re like people who walk by the Cap’n Crunch boxes in the supermarket and eat oatmeal every day. Even a dozen choices can seem too many. So for them,Open-Architecture is overkill.

For all you keep-it-simple investors, the new "lifestyle" funds are a perfect solution — in effect, your entire portfolio in one fund. Also known as "target retirement" funds, all you have to do is pick the date you intend to retire, invest in the fund and add money regularly until retirement.

In fact, once you pick the fund, savings becomes your key to successful investing. For example, let’s say you’re 25 years old and expect to retire in 2035. Check our list of some of the most popular funds and see which works for you, in or out of your 401(k) plan. Many are new with very short track records, but as you can see in the table, they’re beating the S&P 500. So they’re a good choice for passive investors with savings discipline and more important things to do than follow the market and day-trade stocks.

With these lifestyle/target retirement funds you put your money in regularly and let the fund’s portfolios do the heavy lifting for you — all the asset allocation and stock-picking. As you can see, they’ll put more in stocks in the early years and more in bonds as the fund approaches the target retirement date. Then you go about living your life, and enjoy the oatmeal.