By YOUNG MONEY Staff
29 November 2010

Young people are bullish on balanced funds, it appears.

According to the nonprofit Employee Benefits Research Institute, 42 percent of the aggregate retirement account balance of recently hired workers in their 20s was in balanced funds at the end of 2009. In 2008, 36 percent of young workers' total savings were in balanced funds; in 1998, just 7 percent were.

Target-date funds - which, like balanced funds, typically contain a mix of stock and bond investments - are also growing in popularity. At the end of 2008, 23 percent of the aggregate savings of workers in their 20s were in target-date funds - and a year later, 31 percent were.

The EBRI's findings might reflect the fact that the stock market has been unpredictable in recent years. In the go-go 1990s, stock investments did extremely well - the Wilshire 5000 index, which is representative of the stock market as a whole, posted an average annual return of 16.3 percent - but the 2000s were largely a "lost decade," with the S&P 500 index actually losing value.

So now, investors - even young ones - may be looking to reduce risk in their portfolios and diversify away from stocks.