Asset Allocation: Matching the Mix to the Goal
Asset allocation is the decision about how much of a portfolio is placed in broad asset categories. It is a strategic risk decision, not a prediction about which market will perform best next month.
Cash and cash equivalents
Cash can provide stability and liquidity but may earn less than inflation over long periods. It is often used for near-term needs or portfolio liquidity.
Fixed income
Bonds and other debt instruments can provide income and diversification, but values can change with interest rates and issuer credit quality.
Equities
Stocks represent ownership in businesses and can offer long-term growth potential, but prices can fall sharply and returns are uncertain.
A practical next step
Write down the one number or fact from this topic that affects your situation—such as a balance, rate, due date, fee, target amount or policy limit. Then verify any jurisdiction-specific rule with an official source before making a decision.