Asset Allocation: -
By definition asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio’s assets according to an individual’s goals, risk tolerance and investment horizon.
It is important to allocate your resources in the asset class allaying to your financial need to optimize your returns.
Example of Asset classes:-
Debt
Equity
Commodities
Real Estate
Asset allocation goes hand to hand with your defined objectives.It tells about the flexibility and diversification need of your portfolio.