How you split your money often matters more than which individual investments you pick.
Direct answer
Asset allocation is the mix of asset classes in your portfolio, such as shares, bonds and cash. A higher share of shares generally means higher potential growth and more volatility. A higher share of bonds and cash means more stability. Your mix should fit your goals, timeline and comfort with risk.
Factors that shape it
- Time horizon: longer horizons can ride out more volatility.
- Risk tolerance: how you feel about losses.
- Risk capacity: how much loss you can afford.
- Goals: growth, income or preservation.
A gradual shift
Some investors move toward safer assets as they approach a goal. Some funds automate this.
Where Teyro fits
Teyro's How to Understand Investment Risk course turns this into short lessons you can play in a few minutes a day. It has 50 lessons, and you can start free.
The bottom line
Choose a mix you can stick with, and review it occasionally. This is general education, not advice.
This is general education, not personal financial advice.
