What is asset allocation, and why is it essential to smart investing?

Category: Blog

Asset allocation is the practice of diversifying your portfolio into a variety of different types of assets. Some of these assets could include stocks from U.S. and foreign companies, bonds from governments and corporations, and cash or money-market funds. Perhaps your portfolio will be comprised of safer, more conservative assets, but you include some assets that are riskier but have a potential for greater return. Risk can never be eliminated entirely, but with the right asset allocation, it can be minimized. The following article from CPA Wealth Enterprise gives a more detailed explanation of asset allocation. We would be happy to answer any questions you have about this topic, or any other financial planning matters.

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