Asset Allocation & Risk

What is asset allocation?

Asset allocation is a strategy of adjusting the weightings of asset classes such as stocks, bonds and cash to match the investor's risk tolerance, investment goals and investment horizon.

It is characterized by a focus on the characteristics of the portfolio as a whole rather than on individual securities. Many experts regard asset allocation as an important determinant of investment performance.

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This answer is general financial information as of 2026.10.14, not investment advice. Rules and tax rates change, so please also check the latest guidance from the source institution.