Diversified Mutual Fund
Categories: Investing, Stocks, Managed Funds
Mutual funds are a group of stocks and bonds, usually.
A diversified mutual fund usually includes both stocks and bonds—and usually in combos that help you balance risk and reward. If you always look twice before you cross the street and are considering earthquake insurance even though you live in Chicago, you might want a mutual fund that has more bonds than stocks.
The balance between bonds and stocks isn't the only diversity your mutual fund can have. A diversified mutual fund is also usually spread out across different industries. Maybe a fund has some stocks in the tech industry and some stocks in the construction industry, as well as some bonds from companies and some bonds from governments. Even if the real estate market tanks (again), the government bonds and tech industry stocks may keep the mutual fund from being too much of a disappointment.