Bonds are more sensitive to interest rate fluctuations than stocks. Most bond funds will have a mix of high quality bonds, like those issued by the U.S. government and blue-chip companies that pay lower rates of interest, and lower quality bonds that pay a higher rate of interest. Balanced or Asset Allocation Investments. These portfolios comprise a blend of stocks and bonds. Accordingly, their risk-reward ratio generally is somewhere between stocks and bonds.
Indexes are common measures of sectors of the stock market's performance.
By putting your retirement money in an indexed portfolio, your money will grow or shrink, just as the stock market gains or loses ground every day. That's because your money is generally invested in the same companies which make up the index. If you want an investment that seeks to equal a particular sector of the stock market, index funds are considered a way to go. Keep in mind that indexes are unmanaged. In addition, remember you could still lose money.