The Risk of Low-Risk Investments

Don't let your fear of stock stumbles freeze your portfolio's performance. Here are three growth stocks to boost your returns.

There has never been a riskier time to be risk-averse. Investors, fleeing volatility in the stock market, have poured billions of dollars into bonds and high-dividend stocks, pushing their share prices into overvalued territory, says Jeffrey Coons, president and co-director of research at Manning & Napier, a Rochester, N.Y., money-management firm.

The slightest uptick in interest rates could send prices of these supposedly low-risk assets tumbling and leave investors with what they appear to fear most -- a loss of principal. "This is the riskiest environment we've seen since the tech bubble of the 1990s," says Coons, who is a co-manager of Manning & Napier Equity Fund (symbol EXEYX), which has beaten Standard & Poor's 500-stock index by 1.3 percentage points over the past ten years (all prices and returns are as of October 17).

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Kathy Kristof
Contributing Editor, Kiplinger's Personal Finance
Kristof, editor of SideHusl.com, is an award-winning financial journalist, who writes regularly for Kiplinger's Personal Finance and CBS MoneyWatch. She's the author of Investing 101, Taming the Tuition Tiger and Kathy Kristof's Complete Book of Dollars and Sense. But perhaps her biggest claim to fame is that she was once a Jeopardy question: Kathy Kristof replaced what famous personal finance columnist, who died in 1991? Answer: Sylvia Porter.