People Cashing Out of the Market Need to Find a Low-Risk Haven . . .
With the stock market gyrating wildly, bonds troubled by alternating inflation and recession fears, and real estate foreclosures making headlines every day, simply bailing out might be the most comforting thing to do. But finding a good place to park the resulting cash is a challenge.</br></br>Investments that provide strong assurance against loss tend to pay modest returns, and those that offer a better yield can sometimes go south, taking investors' principal with them. What's more, most experts advise against selling in a downturn, especially if you are investing for the long term.</br></br>But if moving some funds to the sidelines is for you, there are a number of safe choices. After inflation and taxes, these safe havens may offer little more than break-even returns -- but breaking even may not seem so bad compared with what has happened recently in the stock market and real estate.</br></br>At the extreme end of the safety spectrum are securities issued by the U.S. Treasury. These are, as far as a loss of principal is concerned, about as safe as it is possible to be. But to get that level of safety in today's market, you have to be willing to accept an interest rate in the 3 percent range -- a trade-off that makes many people unhappy.</br></br>"Everybody's looking for a free lunch, but especially in the cash area, there is no free lunch. As soon as you move off of Treasurys, risk comes into play," said financial adviser Mary A. Malgoire of the Family Firm in Bethesda.