88% Of Your Roth IRA Returns Depend On This

Video Description

According to a report from Vanguard, 88% of your investment returns will be determined by how you have money spread among everything you invest in. Asset allocation is the process of dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash. It is a way to balance risk and return by choosing a mix of investments that aligns with an individual's financial goals, investment horizon, and risk tolerance. The goal of asset allocation is to diversify and manage risk while maximizing returns over the long term. Free copy of the asset allocation tracker shown in the video: https://bit.ly/3LGIxcV Check Out My Recommendations (It helps support the channel): 📝 NewRetirement - The retirement planning tool I personally use to make sure I'm on track with saving for retirement. It's perfect for "Do it yourself" investors https://bit.ly/3EAAhrJ 📊 Personal Finance Bundle Wait List: https://bit.ly/4bpyTHT 📖 Free copy of my Spending Review Spreadsheet: https://bit.ly/48lMVZ1 📧 Business Inquiries: https://bit.ly/44AgfLw Asset allocation is the process of dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash. The goal of asset allocation is to balance risk and return by choosing a mix of investments that aligns with an individual's financial goals, investment horizon, and risk tolerance. Asset allocation is important for several reasons: Diversification: By investing in a variety of assets, an investor can reduce their exposure to any one particular type of risk. For example, if all of an investor's money is invested in one stock and that stock performs poorly, the investor could lose a significant portion of their portfolio. However, if the portfolio is diversified across multiple stocks, bonds, and other assets, the impact of any one asset's performance will be less significant. Risk management: By choosing a mix of assets that aligns with an individual's risk tolerance, asset allocation can help manage risk. For example, a younger investor with a longer time horizon may be able to tolerate more risk in their portfolio because they have more time to recover from any potential losses. Maximizing returns: By diversifying across different asset classes, an investor can potentially increase their overall returns while minimizing risk. Different asset classes have different levels of risk and return, so by investing in a mix of assets, an investor can take advantage of the strengths of each asset class while minimizing its weaknesses. Overall, asset allocation is an important tool for investors to manage risk and maximize returns over the long term. It is important to note that asset allocation should be tailored to an individual's specific financial situation, goals, and risk tolerance, and should be regularly reviewed and adjusted as circumstances change. Affiliate Disclaimer: Some of the above may be affiliate links. Support the channel by signing up or purchasing through those links at no additional cost to you. I appreciate you for helping me keep this channel running. Disclaimer: This video is for entertainment purposes only. Everyone's situation is different so do your own research before making any decisions with your money.