As investors, we’ve often heard about the ‘benefits of diversification’ for investment portfolios and frequently been told ‘not to put all our eggs into one basket’, but have we really thought about what these ideas mean? In this short post, I’ll try to shed some light on this.
I don’t understand asset allocation in any but the simplest of terms. Could you explain to me why I should allocate across different asset classes and regions?
This is the fifth post in my series on the topic of asset allocation. Previously, I’ve discussed accessing asset allocation exposures, how asset allocation is the cornerstone of active portfolio management, provided an overview on the benefits of asset allocation and given you my thoughts on implementing tactical allocations in portfolios.