Talks about portfolio asset allocation are often reignited whenever stock market investors are facing uncertainty.
A portfolio will best match your risk tolerance and risk capacity and put you in the best position to achieve your financial goals within your time horizon.
Before going any further, it is imperative to mention that there is no one best portfolio asset allocation formula for everybody. Since people’s financial goals, time horizon, risk capacity, risk tolerance and income requirements vary, the asset allocation formula most appropriate for them will differ. But let’s take these factors in turn, and it will soon become obvious how they interweave to create an optimal portfolio.
This post originally appeared at U.S. News & World Report.