Asset allocation means that investment funds are allocated between different asset categories according to investment demand, and assets are usually allocated between low -risk, low -income securities and high -risk, and high -yield securities. The purpose of investing is to make money, asset allocation, and to put it in popular point, that is, investing money into different assets, respectively. In short, it is decentralized investment. The most fundamental reason for doing this is because asset allocation can often maximize investment income under the premise of relatively controllable risks.
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Asset allocation, the popular point is to invest in different assets, respectively. In short, it is decentralized investment. is to do this because asset allocation can often maximize investment income under the premise of relatively controllable risks. For example, assuming that you and Pharaoh next door have 1 million, Pharaoh bought stocks and bonds with 500,000, and you bought all 1 million stocks. If the first year of stock earns 60%, bonds earn 4%; the stock loses 50%in the second year, and the bonds earn 5%; the stock earned 10%in the third year, and the bond earned 6%. In the end, you will find that after three years, Pharaoh still has 1.018 million in the end, and you only have 880,000. , although you earn a lot in the first year, the overall income of three years is not as good as Pharaoh, so it is best to choose asset allocation when you have long -term investment and financial management, especially when the amount of funds is relatively large. of course, as a financial concept, for different types of investors, the meaning of asset allocation is different. Is when investing, no matter how much money, you must have the concept of asset allocation. For example, you only have 10,000 yuan to invest now. The more appropriate approach is to buy a fund, but there are many types of funds, with relatively large risks, with stock funds, less risks with bond funds, almost risk -free monetary funds with monetary funds Then you can buy some of these three funds and make a fund portfolio. In fact, this can also be considered financial management with the concept of asset allocation. Finally, let’s talk about definition! Asset allocation: refers to the distribution of investment funds between different asset categories according to investment needs. As a concept of financial management, for different types of investors, the meaning page of asset allocation is different.
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