The table below in this article presents The Skilled Investor’s Fund Authority Score and other information for the American Balanced Fund – Class A Shares.
The diversified investment fund strategy of the American Balanced Fund – Class A mutual fund shares
According to its prospectus filing on the U.S. Securities and Exchange Commission EDGAR system, the investment objectives of this actively managed mutual fund are to (1) conserve capital, (2) generate current income, and (3) obtain long-term growth of capital and income.
The investment strategy of the American Balanced Fund is to “approach the management of its investments as if they constituted the complete investment program of the prudent investor. The fund invests in a broad range of securities, including stocks and bonds (rated Baa or better by Moody’s Investors Service, Inc. or BBB or better by Standard & Poor’s Corporation or unrated but determined to be of equivalent quality). The fund also invests in securities issued and guaranteed by the U.S. government. Normally, the fund will maintain at least 50% of the value of its assets in common stocks and at least 25% of the value of its assets in debt securities, including money market securities.”
Your personal asset allocation decision comes before your selection of mutual funds and exchange traded funds.
When evaluating whether to invest in the American Balanced Fund, you might first want to consider that there are many other large funds with far lower costs and much higher Fund Authority Scores. In addition, there is another consideration that you might wish to take into account.
When you assemble your personal financial portfolio, one of the first steps is to evaluate your personal investment risk tolerance relative to other investors. This evaluation would drive your decision on your personal asset allocation, and it would determine the proportions of stocks, bonds, cash, and other asset classes that you would hold to match your risk tolerance. (See these two categories of our articles: Asset Allocation and Risk Tolerance and Financial Planning — 10 Personal Steps in the Right Direction)
Understanding your relative investment risk preference, you then can determine the relative mix of stocks versus bonds and cash that is better for you. To cut to the chase, it is The Skilled Investor’s opinion that once you have determined the proportions of each asset class that fit your preferences, then individual investors will benefit from assembling their portfolio’s [...]