What Is Asset Allocation?
Asset allocation is the split between equity, debt, and cash equivalents based on your goals and risk profile.
Sample Framework
- Aggressive: 70-80% equity, 20-30% debt
- Moderate: 55-65% equity, 35-45% debt
- Conservative: 30-45% equity, 55-70% debt
Rebalancing Discipline
If equity rises sharply and exceeds target, trim and move to debt. If equity falls below target, add incrementally.
Why It Works
Allocation controls downside risk while keeping long-term growth potential alive.