Markets · 6 pages · 12 min

How an asset allocation is a mix

An asset allocation is the mix of broad buckets, such as stocks, bonds, and cash, in a portfolio.

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From the opening

An asset allocation is the set of weights a portfolio gives to broad kinds of assets, such as stocks, bonds, cash, and sometimes real estate or commodities. The mix matters because those buckets respond differently to growth, inflation, and interest rates, so the weights decide which of those forces dominate the result. The opening covers weights across broad buckets, buckets carry different risks, and market moves drift the mix.

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Inside

Weights across broad buckets
Buckets carry different risks
Market moves drift the mix
Labels can hide the contents
Where the idea stops applying
A distinction worth keeping

Sources

Strategic asset allocation
Portfolio policy weights

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How an asset allocation is a mix

From the opening

Inside

Sources

Also on the desk