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Portfolios 209: How to Invest for Intermediate-Term Goals

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1.
What does the "blend" in large-cap blend funds refer to?
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Growth and value stocks. "Blend" is a recent term coined for those funds that include both growth and value stocks.
2.
What if you dont know how much money youll need in seven years? How should you invest in that case?
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Invest 25% or 35% in bonds and cash and the remainder in stocks. Investing everything in stocks is far too risky given the intermediate-term time horizon. And investing only in bonds wont provide much growth. Combining the two will provide stability and growth potential at the same time.
3.
Why may balanced funds not be the ideal choice for intermediate-term investors?
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Both of the above. You can often buy a short-term bond fund and a large-blend fund and pay less in annual expenses than if youd just bought a balanced fund. And some balanced funds may hold more in bonds than some in-betweeners need.
4.
What does a balanced fund own?
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A balance of stocks and bonds. The typical balanced fund invests about 60% of its assets in stocks and 40% in bonds.
5.
Intermediate-term investing begins with _______.
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Determining your goals and what theyll cost. As with long-term investing, intermediate-term investing revolves around goals and their costs. Choosing the right investment is secondary.