-3. Balanced Funds

A balanced fund aims to do just as it says: balance allocations or target-risk to increase earnings and minimize as best as a possible risk of losses. They maintain a set allocation of stocks and bonds indefinitely.

Because they balance risk between fixed-income and stocks, they tend to be more conservative than even target-date funds for younger investors, and more aggressive than target-date funds for older individuals. But they are far less volatile than just investing in individual stocks or even a portfolio of stocks.

The goal of a balanced fund is to provide solid returns while minimizing risk of losses.