Significance of Asset Allocation

When it comes to matters related to investments, asset allocation is one aspect which you cannot overlook. Asset allocation is the practice of investing one’s money across various asset classes such as equity, debt, real estate and commodities, etc. on the basis of one’s goals, risk appetite and investment horizon. This approach fundamentally aids in minimising risk and optimising investment returns. It works on the often said premise of ‘don’t put all your eggs in the same basket’. Given below are the five reasons which make asset allocation a non-negotiable aspect on one’s investment journey.