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Explanation of this Chart listed in detail
below
 SHORT-TERM Usually one year or
less, often used to refer to bonds, cash, money markets,
certificates of deposit, treasury bills, etc. (need investments ~ 1
year; 100% cash, money market, treasuries, CDs,
etc)
 CONSERVATIVE Cautious; having a
risk-averse investment strategy which has preservation of capital as
a high priority. A mutual fund which emphasizes current income in
the form of dividends or coupon payments from bonds and/or preferred
stocks, rather than emphasizing growth. Income funds are considered
to be conservative investments, since they avoid volatile growth
stocks. Income funds are popular with retirees and other investors
who are looking for a steady cash flow without assuming too much
risk. (need investments < 5 years; 50% bonds; 30% short-term; 20%
domestic stock)
 BALANCED A mutual fund
that buys a combination of common stock, preferred stock, bonds, and
short-term bonds, to provide both income and capital appreciation
while avoiding excessive risk. The purpose of balanced funds (also
sometimes called hybrid funds) is to provide investors with a single
mutual fund that combines both growth and income objectives, by
investing in both stocks (for growth) and bonds (for income). Such
diversified holdings ensure that these funds will manage downturns
in the stock market without too much of a loss; the flip side, of
course, is that balanced funds will usually increase less than an
all-stock fund during a bull market. (need investments ~5 years; 45%
bonds; 10% short-term; 45% domestic stock; 5% foreign
stock)
 GROWTH An investment
strategy aimed at long-term capital appreciation with low risk; it
will likely involve a high percentage of blue chip stocks with low
turnover, and infrequent, trading. A mutual fund whose aim is to
achieve capital appreciation by investing in growth stocks. They
focus on companies that are experiencing significant earnings or
revenue growth, rather than companies that pay out dividends. The
hope is that these rapidly growing companies will continue to
increase in value, thereby allowing the fund to reap the benefits of
large capital gains. In general, growth funds are more volatile than
other types of funds, rising more than other funds in bull markets
and falling more in bear markets. (need investments ~ 5 -10 years;
25% bonds; 5% short-term; 60% domestic stock; 10% foreign
stock)
 AGGRESSIVE
GROWTH A mutual fund which aims for the highest capital
gains and is not risk-averse in its selection of investments.
Aggressive growth funds are most suitable for investors willing to
accept a high risk-return trade-off, since many of the companies
which demonstrate high growth potential can also show a lot of share
price volatility. Aggressive growth funds tend to have a very large
positive correlation with the stock market, and so they often
produce very good results during economic upswings and very bad
results during economic downturns. An aggressive growth fund might,
for example, buy initial public offerings (IPOs) of stock from small
companies and then resell that stock very quickly in order to
generate big profits. Some aggressive growth funds may even invest
in derivatives, such as options, in order to increase their gains.
(need investments > 10 years; 10% bonds; 70% domestic stock; 15%
foreign stock)
 MOST
AGGRESSIVE An investment strategy characterized by a
willingness to accept above-average risk in pursuit of above-average
returns. Usually favors stocks over bonds, especially stocks of
rapidly growing companies, and sometimes employs buying on margin,
options trading, and arbitrage. (need investments > 15 years; 80%
domestic stock; 20% foreign stock)
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