“Asset allocation” is the process of determining which classes of assets to invest in. For example, you may invest 50% in stocks, 25% in bonds, and 25% in cash money market, so the asset allocation would be referred to as # “50,25,25.” The way you allocate your assets determines the return over the long run for your individual portfolio. In 91% of all cases, asset allocation was the key influence on portfolio returns.
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