Asset Allocation and Mutual Funds
- Topics:
- Equity
- Tags:
- Asset,
- Operational Planning,
- Mutual Funds,
- Mutual Fund,
- Human Resources,
- Business Operations,
- Benefits,
- Asset Management,
- Asset Class,
- Asset Allocation,
- ...
- Source:
- The Financial Pipeline
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Overview: Asset allocation is the current rage of the mutual fund industry. In its simplest terms, asset allocation refers to the process of adjusting the relative proportion of different asset classes in an investment portfolio. Precisely because it is so popular, the merits of asset allocation tend to be accepted uncritically. We believe that its merits are seriously overrated.Asset allocation is based on the fact that both the probable return and the probable volatility of each asset class is different. By combining asset classes in different proportions, it is supposed to be possible to modify a portfolio's overall volatility and return.
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