Asset allocation is the strategy of dividing your investment
portfolio across various asset classes like stocks, bonds, and money market securities.
Not exact matches
Investor
portfolios are often diversified
across a wide array of not only stocks (especially for those investing via mutual funds or ETFs), but also
various asset classes (such as bonds and commodities) and geographic regions.
You can do this by assembling your own
portfolio by choosing mutual funds and ETFs
across various conventional
asset classes such as equities, bonds and cash.
A balanced
portfolio can be constructed with many different funds or ETFs
across various asset classes like the two above examples.
The exact allocation
across the
various income producing
asset classes depends on many factors: size of
portfolio, your age, your risk tolerance, your income goal, how long you can tie your money up for, etc..
Choose from a wide selection of funds,
across various asset classes, geographic regions and sectors, to complement your
portfolio.
When the investor spreads the
portfolio across various classes of
assets then it becomes easier to redeem funds in time of need.
Diversification is investing in
various vehicles
across asset classes to reduce the risk that any one investment may pose to your overall
portfolio.
Since different
assets do well
across different periods of time, the best way to ensure that your
portfolio remains stable is by investing in
various asset classes depending on your goals, risk appetite and time horizon.