Mar 21 2009
Aggressive growth funds and Asset allocation funds Investment
Aggressive growth funds usually consist of stocks in small, fast-growing companies. Most of these companies do not pay dividends, and their stock prices are highly volatile.
Risk: Very high
Potential for capital appreciation: Very high
Potential for current income: Low
Asset allocation funds are often called “funds of funds” because they purchase shares in an array of different types of mutual funds—stock, bond, money market, and international, for example—in order to completely diversify an investor’s holdings. The concept behind asset allocation funds is that one fund can be enough for your entire portfolio. Often, you’re given the ability to choose between “aggressive”, “conservative” or “moderate” allocations, depending on your age and ability to tolerate risks.
Risk: Mixed
Potential for capital appreciation: Moderate
Potential for current income: Mixed