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John Burnside

What is Asset Allocation?

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An investment strategy that aims to find an equilibrium between risk and reward by allocating a portfolio's assets according to an individual's:


  • Goals
  • Risk Tolerance
  • Time Horizon


Ideally, in an asset allocation investment strategy, an investor wants to utilize assets that behave differently over time and have different levels of volatility.


The three main asset classes used today include:

  • Stocks (Equities)
  • Bonds (Fixed Income)
  • Cash (Cash Equivalents)


There are hundreds of sub asset classes that investors use to build investment portfolios.  Keep in mind, there is rarely an agreed upon definition for a sub asset class.

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