Investments That Let You Sleep Tight

We identify nine low-risk stock and bond funds, plus three of the market’s steadiest stocks.

When it comes to a choice between making a lot of money in the stock market and being able to sleep at night, many investors would rather get their beauty rest. And who can blame them? A 55% decline in Standard & Poor’s 500-stock index from October 2007 through March 2009 was a painful lesson for those who underestimated the risks of owning stocks.

But a strategy of boycotting stocks entirely comes with one big risk of its own: Inflation relentlessly eats away at the value of your money. If costs rise 3% annually, a dollar today will buy only 74 cents’ worth of goods in ten years. Even the most risk-averse investor needs to find a way to at least stay ahead of inflation.

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Contributing Editor, Kiplinger's Personal Finance