What is an asset allocation model?

An asset allocation model helps investors understand the potential returns from portfolios with varying allocations to stocks and bonds, plus cash. Each type of security offers contrasting advantages and disadvantages. History tells us that over the long run stocks have a higher rate of return than bonds.

What is a good asset allocation strategy?

Allocating your investments among different asset classes is a key strategy to minimize your risk and potentially increase your gains. Your ideal asset allocation is the mix of investments, from most aggressive to safest, that will earn the total return over time that you need. The mix includes stocks, bonds, and cash or money market securities.

What is asset allocation & why is it important?

Asset allocation refers to the mix of different investment assets you own. It describes the proportion of stocks, bonds and cash that make up your portfolio. Maintaining the right asset allocation is one of the most important jobs for long-term investors.