Balanced funds may include a combination of equities and fixed income investments, 'balancing' out risk, but also reducing returns.

Foreign funds offer investors the opportunity to own stocks and bonds of companies outside the U.S. Selections. They include:

• Global funds, which may also encompass U.S. stocks and bonds. Of all the foreign investments, they tend to be some of the safest, since many contain U.S. investments.
• International funds have no U.S. investments, and they run the gamut from safe to risky.
• Country-specific funds will generally invest in one specific country or region and can be very volatile.
• Emerging market funds invest in undeveloped regions of the world. They can offer tremendous growth, but also significant risk.

Money market funds tend to be very safe since they invest in very short-term securities, but also offer fairly low returns.

Dolan Straight Talk Tip: To decide which types of funds are best for you, you will need to consider your time frame for investing, i.e., how long before you retire, and decide how much risk you can tolerate.

If you have many years until retirement and don't mind some risk, you can invest some of your money in higher-return/higher-risk funds that should boost your profits over time.

However, if you've already retired or soon will, you want to be more conservative so you don't lose that nest egg you've built. In that case, stick with the safest funds.

Related Links:

• How to Read Stock Quotes 101
• Dolans 10 Simple Rules of Investing
• Your Investing Mantra

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