Asset allocation refers to an investment strategy in which individuals divide their investment portfolios between different diverse assets classes to minimize investment risks. The assets classes fall into three broad categories: equities, fixed-income, and cash and equivalents. Anything outside these three categories (i.e. real estate, commodities, art) is often referred to as alternative assets. Explain how the following factors influence asset allocation decisions:
i) Personal Goals (2 Marks)
ii) Level of risk tolerance (2 Marks)
iii) Investment horizon (2 Marks)

Differentiate between active and Passive portfolio management strategies

Answer rating: 100% (QA)

i Personal Goals Personal goals significantly influence asset allocation decisions Depending on what an individual wants to achieve they will allocate ... View the full answer