CNBC writes "This low-risk 401(k) investment is guaranteed to not lose your money." They explain, "For investors nearing retirement or already retired who need the certainty of cash but want to squeeze out a bit more yield, a certain investment in your 401(k) plan may fit the bill. It's called a stable value fund (or something similar) and typically is available only through defined contribution plans such as a 401(k). In simple terms, these low-risk funds aim to protect your principal and give you a bit more in earnings than you'd get in a money market fund." The piece comments, "However, they also don't provide much growth, so they come with inflation risk -- which means the value of your money could lose purchasing power. That makes these funds largely impractical for young savers whose retirement is decades away.... Roughly $908 billion is invested in these funds, according to the Stable Value Investment Association. Older investors are more likely to use them as they head toward retirement: Among 401(k) participants in their 60s, about 9.1% of assets are invested in stable value funds, research from the Employee Benefit Research Institute shows. That compares to 1.3% of investors in their 20s." It adds, "Stable value funds generally use short- to intermediate-term fixed income investments, but differ from bond funds in that the share price is a constant $1. There's also an insurance component to these funds, assuring the per-share value won't go below that amount -- which translates into no loss of principal regardless of what the broader markets are doing. In comparison, investing directly in bond funds comes with interest rate risk -- as rates rise, bond prices fall <b:>~_. This year, amid rising rates, `short-term bond funds have lost about 4% year to date."

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