You’ve heard the old saying, never put all your eggs in one basket, and I wholeheartedly agree with that. To smooth your return and have the best chance of generating the return you need, you want to own all different kinds of stocks and bonds – not just the S&P 500 or the Dow or Apple.
But there’s an easy way to do this, outside of owning single stocks and a few random funds that hold who-knows-what?
You canget diversified using just one fund – what’s called a BALANCED fund that includes both stocks and bonds. Typically, balanced funds have a fixed asset allocation, like maybe 70% stocks and 30% bonds. The fund literature will tell you exactly what that is, so you’re not guessing.
The investment objective for one of these balanced funds is a mix of growth and income. Most retirement investors need both of those.
Balanced funds are great for people who want a combination of safety, income, and some capital appreciation – that’s the growth part.