Balanced funds follow a recipe that allows the fund manager to typically mix stocks, bonds and cash in the same fund package. But as is the case with almost everything, the devil is in the details — here, it’s getting the asset allocation right as well as the specific holdings.
Conventional wisdom regards balanced funds as appropriate only for conservative investors. However, I would expand that to investors of any age who are nervous about the stock market and looking for a kinder, gentler way to participate in the equity markets.
If that includes you, you might want to consider one of the following three mutual funds: