On the surface, this might look like another example of wasteful legislation since no one in their right mind would enter into an investment they knew upfront was going to lose money, right?

Well, not so fast.

This one is a bit of a head scratcher, so stay with me.

So why is this legislation necessary and when would a Treasury issued with a negative yield be a viable part of an investment strategy?

In recent years, Treasuries actually have traded on the secondary market with a rate of return below zero if held to maturity. Like smaller individual investors, institutions with large portfolios (hundreds of millions to billions of dollars) need a place to put their money that they feel is safe. At almost any other time they would have no problem finding what they believe to be a safe place for their assets that would earn them at least a little interest. Today, with the world economy being on shaky grounds and few other options, large investors might be willing to sacrifice interest they would have earned in the past in exchange for the “security” of these negative-yield Treasuries. Investors would choose to use Treasuries over other assets as they are backed by the full faith and credit of the U.S. government.

This might be a signal to smaller investors that something isn't right with the system. If large institutions are scared of investments that are not backed by the Treasury — and its ability to print money to cover losses — then we, too, should take a look at what we historically considered "safe" money. In fact, it’s time to start evaluating what role this "safe" money plays in our asset-allocation models.

Many investors believe a balanced portfolio should contain a blend of stocks and bonds as well as some sort of short-term cash reserves. But what if you need some of that money in a down or volatile market? If there aren’t sufficient liquid resources, you could be forced to sell investments at a bad time and take a loss before they’ve had a chance to recover. As our current markets have seen little to no growth for some time now, this investment strategy could have a big impact on your retirement funds.

So it might be a good idea for some investors to have a portion of their money in an institution that guarantees them a return, even if it’s a little one. Years ago, we would have scoffed at the miniscule rate of returns offered on Treasuries today (and you’d likely never see an article about the viability of negative-yield Treasuries to large investors). But sometimes, a return of your money is better than a return on your money. Especially if the alternative means cashing in other investments before their value has rebounded. It’s not so much about the rate of return as it is the protection from buying high and selling low.

If you’re keeping cash with a bank, make sure you don't exceed the FDIC limits in any one account, for if the bank fails, you potentially could lose all the money above their coverage amounts. Should you be worried about your bank failing? According to the FDIC website, more than 400 banks have failed in the U.S. since 2008 compared with only 11 the five years prior. These institutions likely won’t offer warning before they close. If your bank closes and you exceed the FDIC guarantee limit, you are left being a creditor of the bank and only will be paid if the bank has assets left after going into default.

Other opportunities for potentially more stable investments are fixed accounts (such as fixed annuities or fixed deposit accounts) with reliable companies. One way to evaluate reliability is to look at ratings with independent agencies such as Moody’s, Standard and Poor’s and Fitches, with each company having its own standards for measuring credit worthiness. But remember, regardless of a company’s rating there is always risk, and if they go bankrupt, you could lose these assets, too.

So while more-stable fixed income money can be an important part of your portfolio, finding it is harder to do than ever. During these times of volatile markets, we have to change our thinking just like the large institutions have. We might not be able to rely on the same advice or the same strategies as we did over the last decade.

Perhaps the best strategy for right now might be to be happy with smaller upsides in return for increased stability.

Joe Wirbick is the president of Lancaster financial services firm Sequinox and specializes in retirement planning and distribution. This allows him to concentrate on developing strategies that help address the unique issues that confront retirees and those approaching retirement. Wirbick is an investment advisor representative offering advisory services through Jonathan Roberts Advisory Group and securities through J.W. Cole Financial, Inc.