Introduction to Asset Allocation: Creating a Portfolio
Building a portfolio entails combining different investments to work toward your financial goals. You certainly want to get the highest return, but how much risk are you willing to take, and how much risk can you take to achieve those goals?
When you consider factors such as your risk tolerance, risk aversion, and available and future resources, as well as inflation and taxes to create just the right mix of investments, you are well on your way to asset allocation. You also need to know what types of investments meet your needs.