retirement

5 sound investment strategies for retirees

Bonds serve as ballast
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Bonds play an important role in any conservative investment portfolio tailored for retirees, says Corn. "They should be a risk mitigator," he says. "It's not an area where you want volatility or where you want to take risks." He favors high-quality bonds, such as Treasury bonds or highly rated corporate bonds, either individual bonds or bond funds.

Corn doesn't recommend high-yield bonds, also known as "junk bonds." Nor does he like high-yield bond funds because he believes they're too risky. Shorten, however, likes multi-sector bond funds, which are bond funds that invest in a wide variety of bonds, including high-yield or junk bonds, Treasuries, Treasury Inflation-Protected Securities (also known as TIPS), U.S. dollar-denominated foreign bonds and emerging market bonds. "The managers of multi-sector bond funds can choose between sectors and decide, based on tactical considerations of what's going on in the markets, what the portfolio will look like," he says.


 

 

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