Asset allocation funds vary from a balanced fund in one way… versatility. While balanced funds keep a set mix of stocks and bonds to keep up with the market (typically 60 percent stocks and 40 percent bonds), the allocation fund varies in the amount it keeps in both. The Vanguard Asset Allocation Fund, for example, will move money between S&P 500 stock index fund, treasury bonds, as well as money market securities. The factors determining where invested money will be placed depends entirely on the current market.

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A short sell is the promise to deliver a stock the seller does not possess at the time of sale. You must have access to the stock through a broker who will temporarily lend you the stock. The stocks you short come from many sources as they might be owned by your brokerage firm or by another client.

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