With volatility the norm these days, it's scary to think about risking your hard-earned savings in the stock market. But you don't want to run out of money in retirement, which is a risk if you park all of your savings in the bank.
When building a conservative investment portfolio, it's important to take a look at your overall investment plan and your risk profile, says John Corn, CPA, a financial planner with Buckingham Asset Management in St. Louis. "It's all about creating a plan, balancing risk with the need for security," he says. "You also need to look at your spending plan and how much income you are going to need every year, and your sources of income, such as Social Security, a pension and your investments."
Setting up or revisiting your asset allocation is an important part of this process, says Joe Jennings, investment director for PNC Wealth Management in Baltimore. An asset allocation plan divides up your investment assets among different types of investments, such as stocks, bonds, real estate and cash.