What does asset allocation refer to? Diversifying investments among asset classes Calculating investment risks Choosing specific stocks or bonds Timing market entry and exit

t allocation refers to the process of diversifying investments among different asset classes, such as stocks, bonds, and cash, in order to balance risk and reward according to an individual's goals, risk tolerance, and investment horizon. It involves determining the appropriate proportions of each asset class to include in a portfolio in order to optimize returns while minimizing risk. Asset allocation is a key component of a comprehensive investment strategy and is distinct from selecting specific securities (such as individual stocks or bonds) or timing market entry and exit.