Asset Allocation is actually the process of selecting investment rates of the assets of a portfolio among different investment categories. In other words, it is the implementation of a long-term investment strategy of an investor’s assets in the main investment categories, which are Cash, Bond Securities, Equities and other Alternative Investments (e.g. Energy, Property, etc.). The investor’s specific characteristics illustrate the final implementation of this strategy. The main parameters taken into account are:
- Return / Underwriting Risk
- Investment Horizon
- Economic Status
- Exchange Rates
- Optimal Asset Allocation