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Asset allocation is a term used to refer to how an investor distributes his investments among various classes of investment vehicles (e.g. Scarpe Nike Air Force One Scontate , stocks and bonds). You may have a lot of cash but you do not know how you allocate that cash so that you can make money from that invested cash. That is described as Asset Allocation. Asset allocation is a critical component of investing success. Both research and academic studies show asset allocation to be single most significant factor in determining your financial goals. Allocation influences both the total long-term return and risk of your investment portfolio. Other factors such as security selection and market timing account for a very small percentage of your investment returns.

Asset Allocation Basics:


The main idea behind asset allocation is that since not all investments follow a similar cycle, you are able to balance out the different risk and return cycles in your portfolio by spreading your investment dollars among different asset classes such as stocks, bonds Nike Air Force One Scontate , real estate, commodities, and other assets. It certainly doesn't guarantee a profit or protect you against losses Nike Air Force 1 Saldi Scontate , but it can help you manage the amount of risk you face.


The Major Asset Classes:


Below are the three major asset classes you will generally take advantage of when cr