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What is "asset allocation"?

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What is "asset allocation"?

Asset allocation is really the process of trying to manage the individual risk of an asset class. To the extent that an asset class is securities with similar price movements, the goal of asset allocation would be to take different asset classes that have dissimilar price movements with each other so that if one asset class is going up, another one might be going down. That is really decreasing the risk of any individual asset class. The classic example of asset allocation would really be the allocation between stocks, bonds and cash in a portfolio where you might have 5% in cash and 2% in bonds and 75% in stocks.

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What is "asset allocation"?

What is "asset allocation"?

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What is "asset allocation"?

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