Stock Market Purchase: Desperately Seeking Diversity, Simplicity

If you believe selecting the correct investments is complicated, you’re not alone. Investors trying to find simplicity and portfolio diversification are driving demand for all-in-one investment alternatives.

According to Strategic Insights, a marketplace research firm serving the mutual fund industry, more than two-thirds from the $150 billion that investors added to mutual funds in 2004 landed in asset allocation products.

So what exactly are these all-in-one investments? In a nutshell, they’re broadly diversified, professionally managed funds that can serve as a complete portfolio. They come in primarily two flavors.

* Life-style or life-cycle resources emphasis on a specific level of risk. These could be an suitable choice for investors who want a diversified core purchase solution that provides a specific level of threat and possible reward.

* Age- or target-year-based funds focus on a specific investment time frame or goal. As each and every fund’s focus on year approaches, its exposure to stocks (and corresponding threat) will reduce and its exposure to bonds and cash marketplace investments will increase to lessen danger and preserve capital. These resources could be ideal choices for investors seeking a core purchase strategy for retirement planning or who have a set number of years to invest.

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American Century presently offers both types. My Retirement Portfolios is really a series of 5 age- or target-year-based resources, although One Selection Portfolios is a separate series of 5 risk-based resources.

Both portfolios are produced up of American Century stock money, bond resources and funds market resources. The portfolios’ managers adjust asset classes and weightings to emphasize investments they believe provide the most favorable outlook for achieving results.

Ask for a prospectus that contains expense objectives, risks, charges and expenses, and other info that must be carefully read and regarded as just before investing.

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