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  Tuesday November 21, 2017

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AN INTRODUCTION TO BALANCED MUTUAL FUNDS
Learn even more about this topic with the Encyclopedia of Personal Finance™

A balanced fund is generally a "middle of the road" type of mutual fund. Balanced funds invest in a combination of stocks, bonds, and money market instruments (cash). Some balanced funds also include other investment types such as real estate or precious metals.

Balanced funds are managed to attain three main goals:

? To conserve principal and capital

? To maintain current income

? To promote long-term growth

Because bond and stock prices often move in opposite directions, balanced funds holding both securities have lower overall risk. Balanced funds do not usually offer as high a return as pure stock (equity) funds, but they also don't drop in value as much when stocks are in decline. Because of their long-term growth and intermediate-term safety, balanced funds are good long-term choices for investment goals like college or retirement planning for investors with moderate risk tolerance.

Now let's examine what kinds of investments are included in a balanced fund.




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