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What’s so important about asset allocation?
Asset allocation is no big deal -- unless you care about the return on your investments and how much risk you take. If you’re going for the maximum return and the risk of losing it all doesn’t scare you, put your money in the highest risk, highest potential gain investment you can find. If you hate the thought of taking any risk at all, buy Treasury bills and don’t complain about the low return on your investment -- or the risk that your investment may actually be worth less every year due to inflation.
Most of us, however, are looking for a balance between risk and return. You can get a higher return -- without running the risk of losing everything -- by investing in a balanced portfolio of low, medium, and higher risk investments.Return to Questions
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