Asset Allocation is the percentage of different types of investments that make up a specific portfolio. These percentages are usually broken up between different types of stocks, bonds, and cash, depending on the needs of the investor. When deciding on your asset allocation it’s important to consider your age, risk tolerance, and financial needs, to make sure your portfolio is best suited for your financial situation.

In the next two week we will address the importance that age, risk tolerance, and financial needs put on asset allocation and how to best allocate your portfolio for your financial situation. But we first wanted to give you a quick reference for basic asset allocation. This is not a Market Flavor tool but we feel it provides a great visualization of asset allocation and can give investors an idea of where to start for their particular situation.

Here is a great visualization to start with!

Tags:   Asset Allocation Model   Learn to Invest  

Posted on August 21, 2007 6:48 AM | Digg | del.icio.us