There's no such thing as the perfect investment. Stocks carry risks. Funds that bundle stocks can lessen the risk, cushioning sharp downturns but muting spikes as well. And bonds can offset stock losses in the short term, but over long periods, bond returns trail the returns of the stock market.
Having the right mix is especially important to retirees, who should have an investment horizon long enough to weather this storm. Shifting too much money to bonds or under the mattress is no strategy. You should stay diversified, no matter how scary the market gets. T. Rowe Price recommends new retirees keep 40%-60% of their assets in stocks because they hold up to inflation better than bonds and cash. Even 90-year-olds should keep at least 20% of their assets in stocks.
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