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Many investors are socking their retirement savings away in cash amid fear of the turmoil in financial markets. But that’s not a strategy that will pay off, says Robert Kapito, president and founder of BlackRock. He recommends investing in junk bonds, dividend stocks and municipal bonds instead. “There’s a lot of savings sitting on the sidelines, and at today’s interest rates, those savings are not going to last until retirement,” Kapito tells CNBC. “There’s a cost to cash.”

“We like high-yield because companies have been the beneficiaries of low interest rates. Their balance sheets look really good, and they’re offering good yields.” When it comes to dividend stocks, Kapito likes large-cap companies with solid product line-ups that offer attractive dividends and buy back their stock, such as Verizon and AT&T. As for munis, Kapito favors infrastructure and transportation issues.

Source: NewsMax

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