By Jorden Meltz
With many having lost large portions of their retirement savings last year, the question on most peoples minds is how do I make it back? To some the answer is to invest in riskier securities in hopes of making the money back sooner and to others the answer is to avoid risk and work longer. There is no wrong or right answer and instead it is truly a matter of opinion and personal comfort zone. Experts have spoken out about the issue though, and have made strong cases for both sides. Economist Zvi Bodie believes that stocks are always risky and contrary to common belief do not lose their risk over time. It is with this mindset that might lead some to believe investing in treasuries or high rated bonds is their best bet, even at the expense of working several years more. Another less risky approach some are advising their clients to take on is bringing their stock to bond ratio closer together: having a 54% to 46% split versus a more traditional 60% to 40%. With the market still in a state of uncertainty, bonds have continued to perform well, and thus some believe currently they are the better investment. Lastly, since many consider bonds safer investments, are high yield bonds the way to go?. Granted they bring higher returns, but they also have a higher chance of defaulting and thus become a risky investment. Year to date high yield bonds, also known as junk bonds, have been the top performer in the bond category and it will be interesting to see if that statement holds true for the rest of the year. With retirement on the minds of many, there are many questions all having a variety of answers. Although the answer may not be what they want to hear, with retirement approaching quickly for many, they are answers that must be taken into consideration.
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good work
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