You'll want to check with your plan to find out what investment choices exist, and how often you'll be able to buy or sell the investments in order to rebalance your assets every year or so. And opening an individual retirement account at an online brokerage or bank is a buyer's market these days. Most brokers allow you to open an IRA for only a fraction of what it requires to open a regular account. Inflation Inflation lowers the value of your portfolio. In times of inflation, investors tend to reallocate their portfolios toward more cash , and away from stocks and bonds .
Inflation eventually leads to higher interest rates .
For stocks, this means higher borrowing costs for businesses and lower profits. The prospect of lower stock prices leads investors to sell, who then move some of their money into money market accounts and money market mutual funds . These investments offer liquidity , safety, and a higher rate of return than before a rise in inflation. This is because many of these are deposit-based investments, which require higher rates in order to attract depositors. For bonds, inflation means lower prices for all but new bond issues.