Should you rebalance a balanced mutual fund?

Balanced mutual funds invest in both bonds, which focus primarily on income, and stocks, which aim for investment growth. The bond portion of the fund helps offset the risks associated with the stock portion—providing you with a "balanced" investment. You never have to rebalance a balanced fund—it's done for you automatically.

What is a balanced fund?

Despite the common 60% stock and 40% bond starting point, balanced funds come in all shapes and sizes. Some stay close to the classic split between stocks and bonds, while others venture tactically around that anchor. Some use all passive funds as the building blocks, some stand by active management funds, and others use a blend of both.

Should you invest in a balanced fund?

A balanced fund’s goal is to provide a smoother ride than an all-stock portfolio by including bonds, which offer better returns than cash and are less likely to lose money than stocks.