What is asset allocation in investment portfolios?
Asset allocation is the strategy of dividing investments among different asset categories, like stocks, bonds, and cash.
Why is asset allocation important for investors?
It's crucial because it helps manage risk and can improve returns by diversifying investments across various asset classes.
How do I determine the right asset allocation for my portfolio?
The right allocation depends on your risk tolerance, investment goals, and time horizon. A financial advisor can help tailor it to your needs.
Can you give me an example of a balanced asset allocation?
A common balanced allocation might be 60% stocks and 40% bonds, but this can vary based on individual circumstances.
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