Investing in a Balanced Fund

The first conflict that you may have in mind is instead of investing in one scheme and putting all eggs in one basket, it is probably better to invest individually in equity schemes and debt schemes. One of the myths concerning balanced funds is regarding the usage of the word ‘balanced’ and the confusion it tends to create. Investors are often under the illusion that the word balance connotes a 50:50 investment in debt and equities. This could not be far from the truth. The word ‘balance’ is used to denote that equities pose a certain risk to investments due to volatility of stock markets. Hence, to balance out the risk a certain percentage of debt investments are made. Let us have a look at the causes that makes balanced funds the best bet.