Skip to main content

Why You Should Invest In A Balanced Mutual Fund

Brief Insight To A Balanced Fund

Balance funds invest in a mix of equities, money market, real estate and fixed income securities. They attempt to balance the aim of achieving higher returns against the risk of losing money. Most of these funds follow a formula to split funds among the different types of investments. They tend to have more risk than fixed income funds, but less risk than pure equity funds. Aggressive funds hold more equities and fewer bonds, while conservative funds hold fewer equities relative to bonds.

Choosing between equity and debt is difficult in the best of times. To get over this problem, one can invest in a balanced mutual fund. The main objective of these funds is to offer you the best of both worlds while limiting your exposure to the inherent risk accompanying these securities.

Why Invest When The Equities Market Is Currently Bearish?

If your balanced mutual fund is yielding a lower return than you anticipated because of the current bearish market, you may be tempted to cash in your fund units and invest your money elsewhere. The rate of return of other funds may look enticing, but be careful; there are both pros and cons to the redemption of your funds in a bearish market. Let's examine the circumstances in which liquidation of your fund units would have negative consequences.

In a bearish market, most stocks see their share prices fall, often substantially. One of the safest strategies, and the most extreme, is to sell all of your investments and either hold cash or invest the proceeds into much more stable financial instruments, such as short-term government bonds. By doing this, an investor can reduce his or her exposure to the stock market and minimize the effects of a bearish market. But by so doing, an investor would likely move out of the market at a loss position. The inverse position would be to be involved in investing in larger companies with strong balance sheets and a long operational history, which are considered to be defensive stocks. The reason for this is that these larger and more stable companies tend to be less affected by an overall downturn in the economy or stock market, making their share prices less vulnerable to a larger fall. 

The savviest investors know that when stocks are underpriced is the best time to buy. In a bearish market as most stocks are undervalued the price of a balanced fund is also underpriced. Undervalued often is confused with cheap, but the two concepts are very different. A stock/fund is undervalued when the price does not accurately reflect the prospects, assets or revenue stream of the company/entity. Just because a stock/fund has a low share price does not make it a bargain. Price alone cannot be used to determine if a stock/fund is undervalued.

Even the best countries, companies, industries, and sectors fall out of favor from time to time. A fully-informed investor, with a firm understanding of the situation, can calmly stride into a turbulent market and buy up shares/units at a fraction of their intrinsic value. Nigeria’s current economic and politically turbulence has made it unfavorable to investors in the short term but at the long run, we believe that investors’ confidence will be restored and with that share prices of stocks would also elevate thereby increasing unit price of balanced funds. This brings to bear the need to buy now when prices are at its lowest.


Buying or selling a mutual fund isn't something you do impulsively, without a great deal of thought and consideration. Remember that you originally invested in your mutual fund because you were confident in it, so make sure you are clear on your reasons for letting it go. And that to be a savvy investor means you know when to buy and what to buy.

Comments

  1. Interesting post!
    ritaaflyatunova.blogspot.com

    ReplyDelete
  2. Cool!
    Bisous,
    Julie | http://www.juliechagas.com/

    ReplyDelete
  3. This is great!

    http://floralsandsmiles.blogspot.ca/
    twitter.com/floralandsmiles

    ReplyDelete
  4. Nice post!

    Mel
    http://www.girlandthepolkadot.com/

    ReplyDelete
  5. √Wooow! I love your blog. I hope you will like mine

    http://instagram.com/ladyfur?ref=badge

    http://www.welovefur.com

    ReplyDelete
  6. So cool!!! Love this post!!

    http://rednailsladies.com

    ReplyDelete
  7. Thanks for sharing! Great advice :) Happy Friday pretty!

    xx glamdevils.com / miradevils.blogspot.com

    ReplyDelete
  8. lovely write up http://mydiaryasagrowinggirl.blogspot.com/

    ReplyDelete
  9. quite educative www.mrandmissfacebooknigeria.blogspot.com

    ReplyDelete
  10. Awesome post! Nice blog :)

    http://whalespa.net

    ReplyDelete
  11. Super cool post! :D

    www.paseandoamissreichel.com

    ReplyDelete
  12. Great post darling!!!kisses
    http://www.sweetbea.it

    ReplyDelete
  13. nice post, very interesting!
    xxx
    S
    http://s-fashion-avenue.blogspot.it

    ReplyDelete
  14. Great post!
    Baci,
    Marina
    http://www.maridress.blogspot.it/

    ReplyDelete
  15. have a nice weekend!!

    www.fashi0n-m0de.blogspot.it

    ReplyDelete
  16. Awesome post!

    http://salonfurnish.com

    ReplyDelete
  17. Randomly found your blog and can’t express how I like it!
    It was so interesting to read your posts and also I’d like to say that you have beautiful photos!
    I’ll be happy to see you in my blog!)

    Diana Cloudlet
    http://www.dianacloudlet.com/

    ReplyDelete
  18. Such an interesting post! Thanks for the advice. Have a nice weekend!
    xx
    cvetybaby.com

    ReplyDelete
  19. Amazing post.
    It's nice to see some other stuff other than fashion.
    This is a great help.
    XO

    Check my new post.
    http://thebandwagonchic.blogspot.ae/

    ReplyDelete
  20. Nice :)

    http://shareasecretmag.com/

    xoxo

    ReplyDelete
  21. Great post
    https://oneusefashion.wordpress.com

    ReplyDelete
  22. Lovely informative post. http://sophialastyles.blogspot.co.uk/

    ReplyDelete
  23. There is a lot to think about. I am sure you are right, if something is undervalued it might be a good time to buy it, not to sell it..
    www.minsbeautyequipment.com

    ReplyDelete
  24. nice post dear! nowadays, we really have to be more practical and smarter dear :)

    http://lavinajampit.blogspot.com

    ReplyDelete
  25. This article is very interesting even if I'm not in this topic usually.
    have a great start of the week.
    xxx
    mari
    www.ilovegreeninspiration.com

    ReplyDelete
  26. Really interesting post!
    Have a nice day!
    Angela Donava
    http://www.lookbooks.fr/

    ReplyDelete
  27. This was such an informative post! Thanks for sharing <3

    http://www.thestylishbipolar.com

    ReplyDelete
  28. lovely as always honey!
    XX
    www.supongoestilo.blogspot.nl

    ReplyDelete
  29. This comment has been removed by the author.

    ReplyDelete
  30. have a nice night darling!

    www.fashi0n-m0de.blogspot.it

    ReplyDelete
  31. Now this is my type of party. I love this article. Thanks for sharing and check out the Eye Adore series featuring fashion and eyewear.

    Eye See Euphoria | http://eyeseeeuphoria.com/post/eye-adore-aint-no-slouch

    ReplyDelete
  32. great post
    lena
    http://skinnycature.com/feb-coffee-break/

    ReplyDelete
  33. have a good weekend dear!

    www.fashi0n-m0de.blogspot.it

    ReplyDelete
  34. You are super clever!!! More posts please, Chiamaka!
    www.minsbeautyequipment.com

    ReplyDelete
  35. love this, def need to think about these things more

    check out my newest post
    xx
    Tyana
    theluxedition.blogspot.com

    ReplyDelete
  36. cheap toms shoes sale online,only need 17.9$, don't miss it http://www.tomshoesus.com
    Toms Classics Women Shoes Black
    Women Toms Classics Mens Shoes Dark Grey

    ReplyDelete
  37. Christian Louboutin Pumps are so famous for the luxurious and distinctively styled designs, which enhances personal vogue taste and make it easy to match with varied dressing ways.
    Christian Louboutin Pumps 12CM White Patent Leather Pointed
    Christian Louboutin Pumps 12CM Yellow Patent Leather Wavy pointed
    Christian Louboutin Pumps 12CM Black Matte Rhinestone
    http://www.clsneakersmall.com

    ReplyDelete

Post a Comment

Popular posts from this blog

TURBAN DAY

My first attempt at incorporating a turban without wearing a trad went amazing well. I have been tying turbans and scarves a lot lately (and no it isn't religious more like my culture) but never tried it with a top and pants. So today, I decided to break that norm and use a turban with whatever I choose to wear. Hence, this outfit. What are your thoughts?.




My Favorite Links Of The Week

Today I would be highlighting my best links of the week and why. First of, none of the articles were written by me or anyone I know but they have greatly impacted my life. I love to read (it is actually a hobby, dorky I know) and enlighten my perspective on life in generally and this has really contributed to building of my character and probably personality. I will run through the links paragraph by paragraph and hopefully won't bore you.

I stumbled upon this advice "4 Ways to Increase Job Search Confidence" and I was immediately taken because the writer was speaking to me. Generally I tend to shy away from things I know I may not be qualified to do even though I may be wickedly good at it. I kind of keep my talent on the down low for fear of either seeming like a know it all or coming off wrong. I am not a perfectionist by any means but I am one of those people who believe that all arguments or opinions should be factually verifiable (I know it is bad and I am working o…

Suit And Tie

If you remember correctly, I showed you all My Big Reveal. So today you would be seeing it in an outfit. I woke up with Angelina Jolie's outfit to BAFTA award on my mind so I decided to replicate it while adding my own touch to the ensemble.


 Yeah, I tried it out with a white lace top. Different but me right?


 My ultimate goal was to take the look and make it as ladylike as possible without ruining the effect of the suit and tie. I loved the outcome and received lots of complements on it.
I also decide to play with grey, black and blue as my basics.
 What are your thoughts. Do you think my way of replication is cool or I should just stick to basic white shirt?