"Risk and Asset Allocation"

"Risk and Asset Allocation" refers to how investors distribute their money across different types of investments to balance potential returns and risks. By spreading investments among assets like stocks, bonds, and real estate, individuals can reduce the impact of poor performance in any single area. The goal is to achieve a desired return while minimizing the likelihood of significant losses. Understanding one's risk tolerance—how much risk one can handle—plays a key role in deciding the right mix of assets, helping investors align their financial goals with their comfort level regarding risk.