What it is called when someone invests in a variety of places to reduce the overall risk of investing?

Question

Emmett Trujillo

Business

28 March, 12:37

What it is called when someone invests in a variety of places to reduce the overall risk of investing?

+1

Answers (1)

Know the Answer?

Darnell Warren · Answer 1

It is called "Asset allocation".

Asset allocation refers to an investment procedure that means to adjust risk and reward by allocating a portfolio's benefits as indicated by a person's objectives, chance resistance and speculation skyline. The three primary asset classes - equities, fixed-income, and cash and equivalents - have diverse dimensions of hazard and return, so each will act distinctively after some time.

There is no straightforward equation that can locate the right asset allocation for each person. In any case, the accord among most money related experts is that benefit distribution is a standout among the most vital choices that investors make.