Balanced Fund

Definition: A mutual fund that is heavily diversified because it invests in an extremely large number of stocks and bonds.  They also frequently invest in other investments such as bonds and cash.

TeenAnalyst Advice: If you're looking for greater diversification, consider a balanced fund.  In years where the stock market doesn't perform very well, they aren't as susceptible to large falls.  But, also, in years where the market is roaring, they tend to have lower rates of return.Balanced funds are also geared towards people seeking income from dividends and yields on the bonds in the portfolio.  So if one of your goals is income, these might be good investments.