What is Asset Allocation?

Answer:
Asset Allocation is a term which defines how an investor spreads out invested funds

across a variety of investment vehicles (i.e., stocks, bonds, cash).

Asset allocation is an important factor in any stable investment strategy, since it is (partly) what determines the overall level of investment risk and security of a portfolio.

Asset allocation is sometimes thought of as diversification, and it is this diversification that helps minimize overall risks, since it is not expected that an entire portfolio will be significantly affected even if some of the pieces of it don't do all that well from time to time.

As with many investment tactics, asset allocation is something that needs to be carefully thought out. To learn more about asset allocation, consult with a reputable, qualified financial advisor.


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