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Portfolios 209: How to Invest for Intermediate-Term Goals

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1.
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.
2.
What is the best investment option for the growth portion of an intermediate-term portfolio?
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A large-cap blend fund. Mutual funds offer instant diversification, and large-cap blend funds invest in the core of the U.S. market and include value and growth stocks among their holdings. They are steadier than most other types of stock funds.
3.
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.
4.
Which element is perhaps the most important for intermediate-term investors?
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Diversification. Intermediate-term goals require a certain amount of growth without volatility, which can ruin the growth. Thats why intermediate-term goals tend to include a balance of volatilities in their investments.
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.