Learn more about the different types of mutual funds.
As you can see, most mutual funds are diversified by their very nature. Some invest in a combination of stocks, bonds and cash but in differing amounts depending on the investment goal. Others may invest in one type of investment — say, bonds — but divide their money among different bond types. For example, a fund may invest solely in bonds but hold both corporate bonds and U.S. Treasury bonds.
When deciding which fund or funds to invest in, be sure to consider their makeup. You’ll find this information and more, including prospectuses, in this list of American Funds. The goal? To have your money spread out among the different types of investments.