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What is the role of fixed income in a balanced portfolio?

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.

What is my risk tolerance, and why is it important?

What is my risk tolerance, and why is it important?

Risk tolerance refers to the amount of loss an investor is prepared to take on when making an investment decision. Everyone has a different level of risk tolerance based on their personal financial situation and stage of life, and this level of tolerance plays a critical role in determining the allocation of your portfolio.