Strike a Balance

A balanced fund will help keep you on steady ground.
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This story appears in the February 2006 issue of Entrepreneur. Subscribe »

No matter what's going on in the markets, a balanced fund can provide comfort to those unsure of market directions--or who simply want somebody else to do the worrying for them.

Fidelity's Balanced Fund (FBALX) boasts a record that's hard to top: For the year ending September 30, 2005, it ranked eighth out of the 629 balanced funds Lipper tracks. It also earned a five-star overall rating from Morningstar based on the fund's three-, five- and 10-year performance records.

Ask Larry Rakers, the fund's lead portfolio manager since early 2002, why the fund has performed so well, and he'll point to research. "It's just decent stock selection. That's not to my credit--[there is] a great research team at Fidelity," he defers. Additionally, the fund holds plenty of stocks--typically 400 to 500--and at least the same number of bonds.

Rakers is a theme-oriented manager who likes to make "small theme bets." At the end of October, infrastructure, oil and medical stocks had caught his fancy. "I'm betting that the world needs more stuff. Everybody knows oil and copper prices are high, but what we need are more oil rigs and refineries."

Describing the fund as one for "hungry widows and orphans who are risk-averse but need some income," Rakers points out that the fund is not for those who want to get rich quick.

Dian Vujovich is an author, syndicated columnist and publisher of fund-investing site
Edition: July 2017

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