A balanced fund owns both stocks and bonds. It’s a conservative type of fund investment, one that attempts to make it easy for investors to enjoy some of the safety of bonds along with the growth potential of stocks through a single investment.
The typical balanced fund is 60% invested in stocks and 40% in bonds. Its investment objective is to conserve principal (that is, avoid losing any of the money invested), pay current income (that is, dividends), and achieve long-term growth.
If you’re a brand-new investor, a balanced fund can be an easy, safe choice. If you have a little more experience, consider creating your own “balanced” fund by dividing your money between stock and bond funds of your choice.
By selecting funds that closely fit your own investment goals, you’re likely to achieve better results than you can get from a prepackaged balanced fund.
The typical balanced fund is 60% invested in stocks and 40% in bonds. Its investment objective is to conserve principal (that is, avoid losing any of the money invested), pay current income (that is, dividends), and achieve long-term growth.
If you’re a brand-new investor, a balanced fund can be an easy, safe choice. If you have a little more experience, consider creating your own “balanced” fund by dividing your money between stock and bond funds of your choice.
By selecting funds that closely fit your own investment goals, you’re likely to achieve better results than you can get from a prepackaged balanced fund.
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