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Why is Asset Allocation Important to You

1-minute video: Why is Asset Allocation Important?


Why asset allocation is important to you.

The asset allocation decision is one of the most important investment decisions you will make. And as your life circumstances change, so will the appropriate asset allocation decision be made again.

The asset allocation decision integrate several important factors: your goals, when you need the money, your individual risk tolerance, your age and health are among issues to consider.

One overarching goal is to get the best return for the least amount of risk. Too often people invest based on a past record and total ignore the risk it took to get those returns. Further, past performance of an investment is no indicator to future performance.

But the appropriate allocation can lessen your risk and raise the chances you will have the money you want when you need it. Common, basic allocations will include stocks or stock based investments, bonds or bond based investment and cash. There is no perfect mix as no one knows the future, but through analysis you can develop a “good enough” mix of the assets to be used. And from time-to-time you will need to update the allocation due to personal life changes but also due to factors such as the economy, new laws, financial markets to mention a few.

So, take some time to get educated, assess what is important to you and the money that will take and then put effort into developing the “right” asset allocation for you.



This video and text is for information use only and is based on information believed to be true. Much of the information is readily available, but some is drawn from Advisor Products and FAClient articles. The reader acts on these ideas at their discretion and should consider consulting an accountant, financial advisor, or attorney. No promise is made that an idea or concept is appropriate or would work well for the reader. This is not an offer to provide legal advice or act as an attorney. Contact Steven Erickson JD, MBA, CFP(R), Accredited Wealth Management Advisor, Chartered Retirement Planning Consultant at 573-874-3888 This email address is being protected from spambots. You need JavaScript enabled to view it. , if you have questions or to set an appointment. Serving Clients in Columbia, Jefferson City, and the surrounding counties.

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