What is asset allocation?

The video tutorial explains the concept of asset allocation, which involves deciding how much to invest in different asset classes like stocks, bonds, and cash. It highlights the importance of asset allocation in determining portfolio performance, often more so than individual stock or bond selection. The tutorial discusses the characteristics of each asset class, the impact of time horizon on investment strategy, and the role of risk tolerance in shaping asset allocation. It advises regular review of asset allocation to ensure alignment with changing goals and circumstances.

What are the three main asset classes mentioned in the text?

Why is asset allocation considered a crucial investment decision?

How does the time horizon affect your asset allocation strategy?

What should you consider if you are uncomfortable with sudden losses in your investment?

How often should you check in on your asset allocation, and why?