Dividing your investments
Allocation describes the mix of assets you hold — for example, how much sits in broad stock funds versus other holdings. The goal is not to pick a single winner, but to choose a balance you can hold through different market conditions.
Diversification spreads risk
Different assets do not always move together. Holding a mix means a weak stretch for one part of your portfolio can be cushioned by others, which can make the overall ride less bumpy.
Risk and return are linked
Investments with higher potential returns usually come with larger swings in value. A thoughtful allocation balances the growth you are seeking against the volatility you are comfortable holding through.
Allocation is personal
There is no single correct mix. The right allocation depends on your time horizon, your goals, and how you react when markets fall. Longer horizons can often accommodate more short-term ups and downs.
Put this into practice.
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