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What is Asset Allocation and Why is it Important?

Asset allocation is how an individual spreads his/her money over different types of investments such as equities, bonds, cash, real estate, etc. Proper asset allocation is one of the most important factors in achieving a successful investment portfolio. Asset allocation should be determined by many factors including:
  • age of the investor
  • wealth of the investor
  • income of the investor
  • financial goals of the investor
  • risk tolerance of the investor
  • potential financial obligations of the investor

A well designed asset allocation plan can minimize risk, reduce volatility, and increase long term returns of your investment portfolio.

If you have questions about how to properly allocate your investment portfolio, consult a certified financial planner or other financial professional.




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