A balanced portfolio is one that is not putting all the eggs in one basket to maximize profits and minimize risks. Stocks are the principal constituent and the growth engine of any portfolio. But with the volatile market conditions, many at times, they favor the bold and, at times, erode the capital. Hence, to mitigate the losses, investors prefer to invest part of their capital in bonds being fixed income instruments are not much affected by market conditions. And having them in the balanced portfolio could be like a parachute to save the capital from complete erosion during market volatility and to start again with its value as the new capital.
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