asset allocation

Definition

The process of dividing investments among different kinds of assets, such as stocks, bonds, real estate and cash, to optimize the risk/reward tradeoff based on an individual's or institution's specific situation and goals. A key concept in financial planning and money management.

Use asset allocation in a sentence

You should try and do a good job of asset allocation so that you always have a good spread out base.

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To determine your asset allocation, you must decide how much risk you are willing to take, how much you want to invest, and how soon you want a return.

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I have 500 million dollars to invest, and with careful and mindful asset allocation, I am confident that I will receive returns even while other investments fail.

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