What does the term "asset allocation" refer to in investment strategy?

Question

A. Buying and selling assets frequently
B. Concentrating investments in a single asset class
C. Distributing investments among different asset classes
D. Focusing only on short-term investments

Answer 1

The term "asset allocation" in investment strategy refers to:

C. Distributing investments among different asset classes.

This approach aims to balance risk and reward by diversifying investments across various asset classes, such as stocks, bonds, real estate, and cash, to achieve financial goals while managing risk.