Deep in DailyWorth headquarters, we are preoccupied with one thing: Building your worth.
So when it comes to investing, we look for any way—including standing on our heads—to grab your attention.
Pathetic? No. Cunning! Be honest: If you knew this email was about asset allocation, you might not open it.
And that would be a blow to your net worth. And we can't have that.
Wow, that was a lot of build-up
So, what is asset allocation?
Think about your closet. Some people invest more in casual clothes; others in dresses or suits. You "allocate" your wardrobe to reflect your lifestyle, needs and aspirations.
It's similar when you pick the investments in your portfolio or retirement account. What guides your choices are:
- your goals (retirement, down payment, Ph.D.?)
- your tolerance for risk (high, medium, no thanks)
- how long you plan to keep the money invested
It takes a while to develop an asset allocation strategy (or a versatile wardrobe). Once you know your preferences, you then purchase investments—usually mutual funds—that balance your different needs. And…a balanced portfolio helps your money grow steadily over time.
Coming soon... investing expert Galia Gichon's asset allocation boot camp. You're breathless, we know.
Tell us: Do you have an asset allocation strategy already? Do you wish it had a catchy nickname, like assy-allo? We do.
Pop quiz: Which fund comes with the assets already allocated?