What is a balanced investment strategy?

Originally answered Sep 7, 2019

A balanced investment strategy aims to balance a portfolio with:

• Stocks or stock mutual funds

1. Large-cap
2. Mid-cap
3. Small-cap
4. Value
5. Emerging markets
6. International

• Bonds or bond mutual funds

1. Short-term
2. Mid-term
3. Long-term
4. Taxable
5. Tax-exempt
6. High-yield
7. High-quality

• Real estate or Real Estate Investment Trusts (REITs)

1. Commercial
2. Residential

• Other assets

1. Commodities
2. Options
3. Business ownership
4. Precious metals
5. Rare coins
6. Art
7. Jewelry

• Cash

— Money Market Funds

1. Federal
2. Non-federal

— Bank Accounts

1. Certificates of Deposit (CDs)
2. Savings accounts
3. Checking accounts

The ratios will depend on

• Individual risk tolerance
• Tax consequences
• Income needs
• Short-term objectives
• Long-term objectives

See also How to Invest.