'Safe' Strategies Can Be Their Own Risks
BOSTON ( TheStreet) -- Market volatility and a lingering hangover from the recession has left many investors uncertain what to do when it comes to long-term strategies such as retirement plans.
For many, the reaction is to run away from risk and into the seemingly safe confines of conservative investments -- bonds, cash and fixed-income strategies. The flight to "safety," however, can bring about some unintended threats to the long-term success of 401(k) or IRA portfolios.
|It's good to be safe in your investments, but don't be so safe that your approach becomes a threat itself to the long-term success of a 401(k) or IRA portfolio.|
What's in a name
For some investments, being branded as "conservative" or "low risk" is not much more than marketing, says Yuval Bar-Or, an adjunct professor of finance at Johns Hopkins University's Carey Business School and author of Play to Prosper: The Small Investor's Survival Guide (The Light Brigade, 2010).
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