Bond allocation refers to the process by which an investor or fund manager decides how much money should be invested in bonds, and what types of bonds they should purchase. This decision is based on a variety of factors such as risk tolerance, time horizon, and overall investment strategy. Bond allocations are typically made within the context of a broader portfolio that may also include stocks, real estate, cash, and other assets. The goal of bond allocation is to balance the need for income with the desire for capital preservation while minimizing risk exposure.