How does asset allocation help my investments?
June 18, 2014
Asset allocation is the process of spreading your money across stocks, bonds and cash equivalents in a way that reflects your goals and risk tolerance. Allocation is the primary driver of your investment performance - how well your investments do. The appropriate asset allocaon strategy can help reduce the risk associated with any one investment and potentially enhance returns. A number of factors go into choosing an asset allocation that addresses your particular goals and situation, which can include but are limited to: your "investment horizon," which is how much time you have to invest; your risk tolerance, which is how well you can handle the volatility of the stock market; and your overall financial profile. your allocation also depends a lot on how much money you have, how much you need to have in retirement and at what age you want to retire, among other factos. Enlisting the aid of a financial advisor can be very helpful as you develop an asset allocation strategy that can work for you. A financial advisor whom you like and who understands your goals and your dreams can be a great help in creating an asset allocation strategy that is right for you.