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16 February, 09:20

What is it called when someone invests in a variety of places to reduce the overall risk of investing

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  1. 16 February, 11:21
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    Asset allocation

    Explanation:

    Asset allocation refers to an investment approach that seeks to minimize the overall risks of investing by distributing investment assets across different sectors. Asset allocation is a technique of portfolio balancing. An investor aims at balancing risk and rewards by practicing portfolio diversification guided by his investment goals, time horizon, and risk tolerance.

    In asset allocation investment strategy, the investor spreads his or her investment portfolio is diverse asset categories to minimize risk. Investment assets are broadly classified into cash and cash equivalents, fixed income, and equities.
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