What is Asset Allocation?

Asset allocation is an investment strategy to balance risk and return by dividing monies between three main asset classes — equities (stocks), fixed-income (bonds), and cash and equivalents — that is based on an individual’s goals, risk tolerance and investment horizon. Asset allocation is the idea that an appropriately-balanced portfolio consisting of a variety of investments gives you a better chance of growing money over time than trying to buy and sell individual securities at the “right” time. 

 

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Diversifying Your Assets = Feeling More Secure