3 Steps To A Safer Retirement Stash

If all you want to do is protect yourself from a market downturn, the answer is simple: Put your dough in FDIC-insured accounts. Even if stock prices go into a free fall, your principal and investment earnings will be safe.

But that's not a real solution for most people. We know that severe market setbacks are inevitable -- and we get particularly concerned when stock prices are at or near a peak -- but we're not able to predict their timing. For example, when the Dow dropped 15% in the summer of 2011 amid concerns about S&P's downgrade of U.S. Treasury debt, many investors feared the slide would continue. In fact, the Dow subsequently rose nearly 70%. So hunkering down in bank savings accounts, CDs and the like could relegate you to subpar inflation-lagging returns for a long time.

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