Everyone wants to get a stable income when investing, but the fluctuation of the stock market makes people have to think about this problem well. Instead of putting all the eggs in one basket, it is better to spread them among different fund types to minimize the risk.

In the choice of fund types, the following are some sound choices, as well as the characteristics and risks of these funds.

1. index fund

Index funds track specific indexes, such as the Standard & Poor's 500 or the Dow Jones Industrial Average. In most cases, the performance of index funds is highly correlated with the index they track. This means that if the index performs well, the fund will also perform well. Compared with other actively managed funds, index funds usually have lower cost and less risk.

2. Bond funds

Bond funds are funds that earn income by investing in bonds. Bonds are generally regarded as safer assets than stocks because they have fixed interest payments and maturity dates. This means that if you buy a national debt due in 2030, you will receive interest every interest payment date until the last interest payment date, and then you will recover the principal in 2030. Although bond funds are usually more stable than equity funds, they may not provide the highest returns because they usually have lower risk returns.

3. Large funds

Large-cap stock fund is a fund that specializes in investing in large-cap stocks. Like index funds, they also operate based on specific indexes. These stocks are usually selected among the companies with the highest market value, including well-known companies such as Apple, Microsoft and Amazon. Compared with other equity funds, large-cap funds are less volatile, because these companies have existed for decades and are more stable.

4. Hybrid funds

Hybrid fund is a kind of fund that invests in assets such as stocks and bonds at the same time. This diversified approach can usually reduce risks and provide certain returns. The risk level of hybrid funds depends on the stock and bond positions of the funds. If the fund holds a large number of bonds, the risk is low and the return is relatively low. If the fund holds a large number of stocks, the risk is higher and the income may be higher.

To sum up, when choosing a fund type, your best choice should depend on your risk preference, financial situation and investment objectives. Before making any decision, you should carefully study and evaluate the historical performance, expenses, management team and the quality of stocks and bonds held by the fund.