Asset Allocation or Making a Pie Out of Money?

1 Answer

Answer :

When you sit down with a financial professional to talk about investments, one of the first terms you may hear when discussing your portfolio is 'asset allocation'. To take some of the mystical feel away from the term, let's define it in plain words. All asset allocation really means is the breakdown of how much of your total investment portfolio is placed in certain individual asset classes or types of investments. The conversation is sure to be accompanied by visual aids. The most common graphical representation of asset allocation models is the pie chart. It shows how much of your investment pie is made up of each particular asset class, usually showing a percentage number for each slice of pie. Watch for it and you'll see it. When you start making decisions about portfolio construction

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