Stocks & Investing

Asset Allocation

How you split your money among stocks, bonds, cash, and other assets.

Asset allocation is the biggest decision in investing, bigger than any single stock pick. It sets how much risk and return you can expect. A common rule of thumb leans more toward stocks when you are young and have time, and more toward bonds and cash as you near needing the money.

For example

A simple allocation might be 80% stocks and 20% bonds while young, shifting toward 60/40 as retirement approaches.

Related terms

DiversificationPortfolio

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