You may be thinking of buying a balanced fund sometime in the New Year. Rather than do so, however, believe you’re generally better off if you design your own balanced fund. It should be composed of stock funds for growth, and bonds or GICs for future cash flows according to your own personal needs.
Canadian balanced funds, however, essentially combine a stock fund with a bond fund and a money market fund. Already you can see how such funds deny you personal control.
Further, balanced fund managers choose the proportions of these three asset classes according to a strategy decided upon by the fund company, its analysts and portfolio managers.
Some funds use a tactical approach, in effect trading between stocks, bonds and cash as the manager perceives opportunity for profit. Others use a strategic approach to asset allocation, a longer-term approach that emphasizes a more static asset allocation. Needless to say, neither of these approaches addresses the individual needs of you, the investor.