Asset Allocation Models

Asset allocation models are strategies used to distribute an investor’s money across different types of investments—like stocks, bonds, real estate—to balance risk and potential return. These models are based on factors such as investment goals, time horizon, and risk tolerance. By diversifying, they aim to reduce the impact of any one investment’s poor performance on the overall portfolio. Different models, such as strategic or dynamic asset allocation, guide how often and how much to rebalance the portfolio, helping investors manage risk while striving for their desired financial outcomes.