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  1. Home
  2. /Glossary
  3. /Asset Allocation
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traditional-finance

Asset Allocation

How you divide your investments across different asset classes like stocks, bonds, crypto, and cash.

Definition

How you divide your investments across different asset classes like stocks, bonds, crypto, and cash. Your allocation should match your risk tolerance and time horizon. A common rule is subtracting your age from 100 to get your stock percentage, though crypto complicates this old formula.

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Related Terms

Portfolio

Your collection of investments across different assets.

Diversification

Spreading investments across different assets to reduce risk.

Risk Management

Strategies for limiting potential losses in your investments.

Accredited Investor

Someone who meets specific income or net worth thresholds set by regulators, qualifying them for investments not available to the general public.

Anti-Money Laundering (AML)

Laws and procedures designed to prevent criminals from disguising illegal funds as legitimate income.

Blue Chip

A well-established, financially sound company or crypto project with a proven track record.

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