Asset Allocation
Asset allocation is how you split your money across asset classes like stocks, bonds, and cash.
Why this matters
Your allocation is one of the biggest drivers of risk and return. It shapes how bumpy your journey feels.
Simple example
A beginner portfolio might be 70% stocks, 25% bonds, and 5% cash.
Common mistakes
- Copying someone else’s allocation without considering your own goals.
- Changing allocation every time headlines get scary.
- Holding too many similar assets and calling it diversified.