Retirement investors need to focus on growth in their investment portfolios, but it's important to have some less volatile investments. Yet with bonds having offered poor interest rates lately, it's been hard for retirement investors to find the returns they'd like to see.
In the following video, Motley Fool investment planning editor Lauren Kuczala talks with longtime Fool contributor and retirement expert Dan Caplinger about looking at savings bonds as an income-producing investment. As Dan notes, although most bond investments face the potential for dramatic falls in price if interest rates rise, savings bonds are guaranteed not to lose value regardless of what happens with rates. Moreover, with valuable features like inflation-tracking, certain types of savings bonds will help you preserve the purchasing power of your investment. Dan runs through what you need to know about savings bonds, including annual limits and other features that you should be aware of before choosing whether to use them as part of your overall retirement investing strategy.
For the higher-growth portion of your retirement portfolio, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.
This article was originally published as This Surprising Bond Investment Has Some Smart Benefitson Fool.com
Copyright © 2009 The Motley Fool, LLC. All rights reserved.