Asset allocation Close
Asset allocation is an investment process that requires you to allocate a percentage of the value of your investment portfolio to a designated class of investment assets. The major three asset classes used for asset allocation are stocks, bonds, and cash. Allocations generally become more conservative as you get older and have less time to recover from declines in the market. As a result, younger investors tend to be more aggressive, allocating higher percentage of their portfolios to stocks. Over time, investors shift assets towards more conservative investments in bonds and cash in order to preserve their investment capital.