"Balanced-fund investors have three options.... [1] [P]retend that this year never happened, by continuing to do what they have long been doing.... [2] Rather than rely on what essentially are two assets -- stocks to provide high returns, and bonds to function as ballast -- balanced portfolios should invest more broadly.... [3] [B]alanced-fund shareholders might benefit by temporarily adjusting their allocations to favor inflation-resistant assets such as commodities, gold, and liquid alternatives. Then, when the economic climate reverts to the norm, swap those assets for Treasuries, thereby returning to the previous formula."

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