For new investors who are just building their investment portfolio, balanced mutual funds may have a great appeal to you and for seasoned investors, balanced funds provide a great deal of assurance and certainty. If stock markets take its toll, balanced funds will not be hit as much as it will on stocks.
This explains why people are into balanced mutual funds nowadays. According to the Investment Funds Institute of Canada, Canadians held $416 billion of balanced mutual funds in investments. This accounts to nearly half of the long term investments in mutual funds. The market for balanced funds is increasing over time and though balanced funds are expensive, it is highly convenient. Balanced funds also are kind of investing and here are some guidelines on how to know if balanced funds are up in your alley:
• You have the right objectives and risk tolerance. Consult the opinion of an investment counselor to educate yourself more on risk tolerance to help you align your objectives and goals.
• You have the knowledge how to compare the performance of the common types of investment products. You’ll know if balanced funds are right for you if you are able to compare the risks from other investment products and determine if it suits your investment needs.
• If you’re the type of person who does not want to be concerned on the nitty gritty stuff of the investment world, balanced funds are for you. It minimizes the number of points that the investor has to think about.
• If you are the type of investor that wants more flexibility and more control in your investment approach, balanced funds may not be for you
Before making any investment decision, evaluate carefully your risk tolerance, goals, and make sure you do your homework in studying the market. By being well informed about the type of funds available in the market, it enables you to have a better picture of what your next move will be.