Graph: See $10,000 Grow Over Time

Even a small allocation to stocks over time can make a big difference in your overall returns.

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If you had invested $10,000 in the Barclays Capital U.S. Aggregate Bond Index at the beginning of 1976, it would have been worth almost $169,000 at the end of June. Over the same time period, a portfolio with a 20 percent allocation to stocks would have netted you close to $217,000. That's why, even for conservative investors who are in or nearing retirement, John Thompson, vice president at Ibbotson Associates in Chicago, says he would advise allocating at least a small portion of their portfolio to stocks.

[See The Case for (and Against) a Stockless Portfolio.]