Balanced Investment Strategy

Search Dictionary

Definition of 'Balanced Investment Strategy'

A balanced investment strategy is a way of investing your money so that you have a mix of different types of investments. This can help you to reduce risk and improve your chances of achieving your financial goals.

There are many different ways to create a balanced investment strategy, but some common elements include:

* Stocks: Stocks are shares of ownership in a company. They can be a good way to grow your money over time, but they can also be volatile.
* Bonds: Bonds are loans that you make to a company or government. They pay you interest over time, and they are generally considered to be less risky than stocks.
* Cash: Cash is a safe investment, but it doesn't earn much interest.

The exact mix of investments in your balanced investment strategy will depend on your individual goals, risk tolerance, and time horizon. If you are young and have a long time horizon, you may be able to take on more risk and invest more in stocks. If you are older and closer to retirement, you may want to invest more in bonds and cash.

It is important to remember that no investment is without risk. Even a balanced investment strategy can lose money in the short term. However, over the long term, a balanced investment strategy can help you to achieve your financial goals.

Here are some additional tips for creating a balanced investment strategy:

* Diversify your investments. Don't put all of your eggs in one basket. By investing in a variety of different asset classes, you can help to reduce your risk.
* Rebalance your portfolio regularly. As your financial situation changes, you may need to adjust your investment mix. Rebalancing your portfolio can help to keep your risk at an appropriate level and ensure that you are on track to achieve your goals.
* Get professional help. If you are not sure how to create a balanced investment strategy, you may want to consider getting professional help from a financial advisor.

Do you have a trading or investing definition for our dictionary? Click the Create Definition link to add your own definition. You will earn 150 bonus reputation points for each definition that is accepted.

Is this definition wrong? Let us know by posting to the forum and we will correct it.