RobertPowell

The sky is falling. Well, not really. But oil prices and the euro are. What’s more, investment experts are calling for other assets — sorry, New England Patriots — to deflate as well.

So what does that mean for the investments you’ve earmarked for retirement?

But that reassessment might not involve wholesale changes. “Given the recent market volatility I am advising many retired clients to consider a more defensive posture in their retirement portfolio,” said Steven Gattuso, president of the CFA Society of Buffalo and senior portfolio manager at Courier Capital Corporation in Buffalo, N.Y. “You still want to stay diversified so the adjustments that are currently recommend are tactical tweaks rather than wholesale portfolio changes.”

What the oldest stock market Index is saying

Marketwatchs Mark Hulbert joins MoneyBeat and explains If you want to know whether lower oil prices are benefitting the economy, take a look at the Dow Jones Transportation Average.

According to Gattuso, the tweaks should take into account an investor’s risk tolerance and time horizon. That said, U.S. investors with an average risk tolerance and a time horizon that is at least 10 years or more might consider the following: Reduce the duration of your fixed-income portfolio to be somewhat protected in case U.S. interest rates do rise. “This can be done with funds or ETFs that focus on high quality shorter maturities or even adding floating rate products to the portfolio,” said Gattuso.

Another adviser agrees. “Given what interest rates are today, there is an inherent amount of risk in the fixed-income markets,” said KC Mathews, an executive vice president and chief investment officer at UMB Bank in Kansas City, Mo. “So we caution investors not to chase yield and the length of their fixed-income portfolio or duration should be controlled.”

There are, however, pockets of value. “Corporate balance sheets in the U.S. remain healthy, which would lead us to invest in corporate bonds,” Mathews said.

And if you’re investing in fixed-income securities and are or will be in a high tax bracket in retirement, Mathews said “municipal bonds will remain attractive, as cash flow is tax-exempt.”

Witt, with Private Asset Management, recommends using what’s called the barbell strategy. “With the U.S. economic recovery appearing more certain, the Fed ended its QE program last year and expectations are that it will increase short-term interest rates sometime mid-to-late this year,” said Witt. “Analysts are forecasting that the U.S. dollar will continue to strengthen in 2015, perhaps indicating that these capital flows may continue and long-term interest rates may only rise slightly. Should this be correct, then the yield curve could continue to flatten and a barbell structure in a fixed-income portfolio would likely outperform.”

A barbell structure, Witt said, invests primarily in short- and long-term fixed-income securities, rather than evenly spaced maturities or a concentration in the middle of the yield curve.

Avoid high-yield energy securities

Interest rates are being held down right now, in part, by the significant fall in oil prices. And that is negatively effecting inflation rates, Witt said. “Since inflation is one of the factors that determine nominal interest rates, the fall in inflation is putting downward pressure on these rates.”