Asset allocation

Is diversification enough to achieve the investment/trading goals?

No! You should not go and invest in a 1000 different stocks and think thus is the best approach. 

Asset allocation is another important part of a good strategy. 

To allocate your money towards different assets, you should consider the following:

   Your risk tolerance 

   Targeted performance 

   Meeting your investment wealth objects.( maybe more money in your pocket)

Strategically you should think long term : 

This means you should decide which asset classes you want to invest in and how much.

Example:

You may have 50% Stocks 

40% bonds and 10% cash long term

Tactically you may change the allocation to meet short term goals. These can be achieved by taking advantage of temporary market situations. 

Example:

Asset manager may realise that stock will underperform in short term then changes the allocation in short-term to achieve wealth objectives. 

They may decide to change the allocation in short term to 30% Stocks 

50% bonds and 20% cash(Or Cryptocurrencies or FOREX)

#forex 

#gold