Optimal Portfolio Allocation: Balancing Risks for Maximum Returns

This lesson continues the discussion on money management, focusing on portfolio allocation and diversification. It covers how to allocate investments in equities, the importance of balancing portfolios, and the role of correlation in investment strategies. The lesson emphasizes the need for diversification across different asset classes, including international stocks and commodities, to mitigate risks and seize global opportunities. The session concludes by highlighting the significance of diversification in maintaining a balanced and risk-adjusted portfolio.

What percentage of total investment should be allocated to each stock according to the theory presented?

Explain the correlation between stocks and bonds as mentioned in the lesson.