Deciding how much to hold of each type of asset
Asset allocation is the decision of how much to hold in stocks, bonds and cash. Studies find that over long periods this mix explains more of the result than which individual holdings were chosen. The more you hold in volatile assets, the larger both the gains and the falls. The mix is usually set against your age and when you expect to spend the money.
In a 60/40 mix of stocks and bonds, a 20% fall in stocks costs the portfolio about 12%.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.