Strategy Intermediate: 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.
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.
3.
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.
4.
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.
5.
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.