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Q&A: What is the role of fixed income in a balanced portfolio?

Q&A: What is the role of fixed income in a balanced portfolio?

Balanced portfolios combine various asset classes and investment strategies to balance an appropriate level of risk with an acceptable level of return. These portfolios are typically comprised of a mix of equities (i.e. stocks) and fixed income (i.e. bonds). Historically, bonds have served three major purposes in balanced portfolios: diversification, capital preservation, and income generation.