Basics

Asset Allocation

Asset allocation is how you divide your portfolio among different asset classes like stocks, bonds, and cash. It's one of the most important factors in long-term returns. Common rules: 60/40 stocks/bonds or age-in-bonds.

Example

A 60/40 portfolio has 60% in stocks and 40% in bonds.

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Asset Allocation — Definition & Example | Investors Lab | Investors Lab