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Financial Advisor Gaithersburg MD: What is Asset Allocation?


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Gaithersburg, (301) 812-4608
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What is Asset Allocation?

Our financial advisors can help you determine what an appropriate asset allocation would be for your risk tolerance.  First, what is asset allocation? Asset Allocation is the process of how you distribute your assets. There are many different ways to invest your assets and finding the right levels of risk and returns are important for your financial future.

The basic idea of allocating your assets is to balance the risk of your investments by dividing your assets into diverse categories so you don’t keep all of your financial eggs in one basket. Different investments will react differently over time. While some investments might increase in value in a certain situation, others may decrease or not change at all. Asset Allocation helps protect you against losing everything in a single investment.

Ways to Diversify Your Assets

Our financial advisors will help determine the best ways to diversify your assets, across the different investment categories, based on your personal goals for your financial future. Some investment categories include large-cap, small-cap and mid-cap stocks, real estate, cash, corporate bonds, etc.. These categories all have different levels of risk and returns. There are numerous ways to allocate your assets and there is no one right way to distribute your assets within the investment categories. Each individual’s personal financial situation, future goals, and investment preferences will determine the best way for that person to allocate assets.

Asset allocation is one of the most important decisions that investors can make. Our financial advisors are here to help you decide the right combinations of high risk and low risk stocks, and short term and long term bonds.  

If you need more information about asset allocation, contact CIC Wealth today; our financial advisors are here to help.

Asset allocation programs do not assure a profit or protect against loss in declining markets. No program can guarantee that any objective or goal will be achieved.