Asset Allocation - All Eggs in One Basket?

​Asset Allocation is the process of balancing risk versus reward. Asset Allocation is an investment strategy to diversify one’s portfolio across a wide range of different asset classes. With Asset Allocation, you can spread your investment across multiple channels, such as several geographical regions, bonds, cash, real estate, private equity, commodities, and industries. The aim is to minimize the risk of all the investments falling simultaneously, by diversifying across uncorrelated instruments. When your assets are allocated correctly, you get the best possible compound returns on your investments. Subsequently, if the value of one asset class declines significantly, the impact on the portfolio overall is minimal. The perfect asset allocation portfolio truly depends on your time horizon and your ability to tolerate risk. 
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