Balanced Investment Portfolio for Medium-Term Goals

This recommended investment portfolio is one of 20+ mutual fund portfolios that we've assembled for investors with different time horizons and risk-tolerance levels to consider. Visit our Portfolio Finder to see them all.

 
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Balanced Investment Portfolio for Medium-Term Goals

For near-retirees seeking protection and safety
 65% Stocks |  25% Bonds |  10% Alternative | 


 Data through August 31, 2016

FUND NAME SYMBOL % OF
PORTFOLIO
YTD
RETURN
1-YR
RETURN
3-YR
RETURN
5-YR
RETURN
10-YR
RETURN
MAX LOAD EXPENSE RATIO
AlternativeArbitrage FundARBFX5%2.15%2.69%1.69%1.3%2.84%2.00%r1.47%
StockDodge & Cox International Stock**DODFX124.71-0.992.685.612.85none0.64
StockDodge & Cox StockDODGX128.268.4410.0314.615.7none0.52
BondDodge & Cox IncomeDODIX106.836.664.544.195.45none0.43
BondHarbor Bond InstlHABDX105.414.814.083.585.64none0.52
StockOakmark International Small Cap I**OAKEX83.25-0.242.076.363.72.00r1.35
AlternativePimco CommodityRealReturn Strategy DPCRDX57.49-8.37-14.45-13.13-4.91none1.19
StockT. Rowe Price Emerging Markets StockPRMSX817.9317.3551.414.032.00r1.24
StockT. Rowe Price Small Cap ValuePRSVX814.915.298.4412.337.681.00r0.8
BondT. Rowe Price International BondRPIBX512.811.641.5-0.123.432.00r0.83
StockT. Rowe Price Real EstateTRREX510.221.9815.9613.056.161.00r0.76
StockVanguard Dividend Growth Inv**VDIGX127.6814.3411.6313.958.76none0.33
   1008.217.745.276.534.78 0.75
** Closed to new investors. # Closed to new investors; other share classes are available.
r Maximum redemption fee charged when you sell shares. s Front-end load; redemption fee may apply.
— Fund has not existed for the specified time. Source: Morningstar, Inc..

We suggest this investment portfolio as a starting point for someone who is six to ten years away from a goal.

This portfolio should appeal to couples like Lynda and Tim Kalucki, who are comfortably on track for retirement. In addition to socking money away for college for their three daughters, ages 7 to 12, they save $80,000 to $100,000 per year toward retirement. They can afford to do so because Tim, 42, co-owns ITS Technologies, a specialized job-placement service, and Lynda, 41, runs the office of a large medical practice near their hometown of Sylvania, Ohio. Tim isn't sure whether he will sell his company outright after he retires or cash out over time. Either way, the couple will get a big boost in retirement.

The success of Tim's company, like any other small business, is tied to the economy. Because the couple's future income is so dependent on the business, they have a large amount of stock-like risk built into their finances. As a result, they should hold more in bonds than another couple with the same time horizon might need. The portfolio would have lost 40% during the bear market but recovered 80% since.