FinLexicon Term Details

Asset Allocation

The mix of assets often matters more than choosing one perfect product.

Category: Portfolio Management Difficulty: Intermediate 1 min read Sample Term

Definition

Asset allocation is the decision of how money is divided across assets such as equity, debt, gold, and cash.

Case Study

A 30-year-old and a retiree may hold very different equity and debt mixes because their goals and risk capacity differ.

Historical Reference

Institutional portfolio theory brought asset allocation to the center of modern investing.

Illustration

Related Terms

Mutual Funds

Mutual Fund

Use this term to understand professional fund management, diversification, and expense ratios.

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Investment Basics

Inflation

Every long-term plan should consider whether returns can beat inflation after tax.

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Risk Management

Diversification

It does not remove risk, but it can reduce dependence on one outcome.

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Investment Basics

Goal Time Horizon

Explore this connected FinLexicon concept.

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Emergency Fund

It protects investment plans from being disturbed during urgent situations.

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Investment Basics

Liquidity

Liquidity matters most during emergencies and short-term goals.

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