Moderate Investing

BONDS (and funds that mix bonds with money markets or stocks) Moderate risk Moderate potential return

The chief risk in the bond market is probably getting a too little return on your investments. There isn't much risk, meaning there isn't much reward. Stocks have always done better over the long run. But investing in bonds does make sense if you're close to retirement and will need the money in a few years

People who prefer to earn a little more reward - in return for a little more risk - often choose a moderate investment. These are usually bond funds, or funds that blend bonds with either money markets or stocks.

Basically, bonds are loans you give to companies and institutions who promise to pay back the amount you lent them, plus interest. Bond funds tend to have a moderately higher level of risk than more conservative investments. As a result, they offer a moderate potential for reward.