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By James Dolan
It’s all in the mix
The importance of asset allocation in your portfolio
It’s the villain of both professional and personal investors. The nemesis of retirees. It’s the bad
guy lurking in the financial shadows, looking to mug your portfolio and take all of your hard-earned savings…
OK, maybe that last one was a bit dramatic. But you get the point. Market volatility can play havoc with
your long-term financial plans, disrupting your ability to save for the future, retire in comfort or realize other
important financial goals.
Nevertheless, volatility is an inevitable part of investing. Try as we may, there is no absolute cure for the ups
and downs that happen in the market. Like it or not, your portfolio will fluctuate in value.
That said, there is a way to keep volatility to a minimum. It’s called asset allocation. Practised properly, a
successful asset allocation strategy can give investors the best of both worlds; minimizing portfolio volatility
at the same time as it maximizes long-term portfolio returns.