Why you need a well-thought-out asset allocation to build your portfolio

Asset allocation is the process of allocating your investments in different asset classes like equity, debt, real estate, bullions, and so on. The primary objective of asset allocation is risk management by diversifying one’s portfolio into different asset classes. The objective of a well thought out asset allocation is to build a portfolio that closely matches your future return expectation, while keeping in mind the risk or volatility that you can bear. You should know that not only is asset allocation different for different people, it is also dynamic and it changes as per circumstances.