Balance Funds

Balance funds invest in both stocks and bonds. Depending on the economy, the mix between stocks and bonds will change. Investors will receive returns in the form of interest, dividends and capital gains. These unit trusts are generally among the safest investments but also have lower return.

Personally, this is only type I fund I haven’t started to invest. If you look at it, it is a fund in between the highest risk funds (i.e. stock fund) and lowest risk funds (i.e. bond fund). If I want to take more risk, I go for stock fund and if want to be more conservative I go for bond fund, If I want to diversify my investment, I go for both. If I already diversity my investment (e.g. buying both stock and bond funds), do I really still need to go for balance fund? Will it be over diversity? I kind of think so. What about you?