Asset Allocation

We’ve all heard the saying, “Don’t put all your eggs in one basket.” This is particularly true for investing. By dividing your investments among four basic categories – stocks, fixed income, cash equivalents and other tangible assets – you can help preserve capital, increase liquidity and decrease volatility.

Don’t underestimate the power of asset allocation. It’s one of the most significant factors influencing portfolio performance. In fact, as much as 90% of a portfolio’s variability and 100% of its return over time is explained by asset allocation (Ibbotson, 2000). Asset allocation doesn’t eliminate risk, but it can reduce your exposure to extreme highs and lows in performance. That means asset allocation is one of the most important decisions you can make.

Learn more about asset allocation.