what is a balanced investment strategy 
a balanced investment strategy combines asset classes in a portfolio in an attempt to balance risk and return typically balanced portfolios are divided between stocks and bonds either equally or with a slight tilt such as 60 in stocks and 40 in bonds balanced portfolios may also maintain a small cash or money market component for liquidity purposes understanding a balanced investment strategythere are many different ways to put together a portfolio depending on the preferences and risk tolerance of the investor on one end of the spectrum are strategies aimed at capital preservation and current income these generally consist of safe but low yielding investments such as certificates of deposit investment grade bonds money market instruments and some blue chip stocks that pay dividends such strategies are appropriate for investors concerned with preserving the capital they already have and less concerned with growing that capital on the other end of the spectrum are strategies aimed at growth these more aggressive strategies generally involve a higher weighting of stocks including small cap companies if fixed income instruments are included they might have lower credit ratings or less security but offer a higher yield such as in the case of debentures preferred shares or higher yielding corporate bonds growth strategies are suitable for younger investors with a high risk tolerance who are comfortable accepting greater short term volatility in exchange for better expected long term returns investors who fall between these two camps can opt for a balanced investment strategy this would consist of mixing conservative and aggressive approaches for example a balanced portfolio might consist of 25 dividend paying blue chip stocks 25 small capitalization stocks 25 aaa rated government bonds and 25 investment grade corporate bonds although the exact parameters can be fine tuned most balanced investors will be seeking modest returns on their capital along with a high likelihood of capital preservation in the past investors would need to assemble their portfolios manually by purchasing individual investments alternatively they had to rely on professionals such as investment advisors or services offered through their financial institutions today automated investing platforms allow investors to automatically invest in a selection of strategies organized by risk tolerance the process of portfolio allocation is more accessible than ever 