Beginner’s Guide on Asset Allocation
Each asset class has its own set of financial risks, and each has its own set of characteristics that influence market performance. Asset allocation is a crucial step in achieving your financial objective because asset classes rarely move in lockstep. If there are two things that investment advisers and portfolio managers swear by, they have be portfolio diversification and asset allocation. Both strategies have stood the test of time to help generate wealth in the long term and reduce the impact of volatility. Although there are no formulas or short-cuts, asset allocation can help you create a fool-proof investment portfolio. Eventually, you will develop an understanding of making immaculate buy and sell decisions and for selecting the perfect investments. However, before entering the complex market of investing and reaping benefits from it, you must have a thorough knowledge of asset allocation. Let us understand the process of asset allocation, how it works, and what strategies you should use. What is asset allocation? Asset allocation acts as an investment strategy that sections your investment portfolio among different asset classes to balance the overall risks and benefits. The purpose is to minimise the risk of your investment portfolio even