Introduction to Personal Investing

The Basics

What is an “asset allocation strategy”?

Many investors adopt an asset allocation strategy in which you buy and invest in a mix of investments believed to achieve the highest return for whatever level of risk with which you are most comfortable. The main logic behind asset allocation strategy is that each category of investment, if properly selected, may perform differently than the others, given different economic conditions. Typically, as stocks or equity investments rise, bond investments may not perform as well. When institutional investors begin to load up on bonds, equity markets may not do as well. With asset allocation, you try to balance your portfolio in an attempt to take advantage of the ebb and flow of various economic and market conditions.


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