Asset allocation involves dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash. The process depends largely on the investor’s goals, risk tolerance, and investment horizon. The idea behind asset allocation is that because not all assets move in the same direction at the same time, diversifying among different asset categories will help manage risk and reduce the volatility of an overall portfolio. Various strategies and theories, like strategic and tactical asset allocation, guide investors in achieving an ideal mix.
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About the author
Jenna Lofton, an expert in stock trading, investing, and financial planning, combines over a decade of experience with rigorous academic training. Holding dual MBAs in Finance and Business Administration from the University of Maryland, Jenna's expertise is grounded in a deep understanding of the financial markets. Her career, which started on Wall Street, has evolved into empowering others through her insights and analyses in the dynamic world of finance.
Based in New York City, Jenna's approach is informed by her hands-on experience as a former financial advisor and her keen observation of market trends. She is known for translating complex financial concepts into actionable strategies, making her a valuable resource for both seasoned investors and newcomers to the stock market. Her commitment to financial literacy and her ability to demystify investment principles have made her a respected and authoritative voice in the investment community.