Thread by @fred_babu

I get many DM's by new investors asking which stocks they should buy without actually understanding the basics of asset allocation.

Your chances of success are much higher if you focus on asset allocation vs trying to find the next $TSLA or #Bitcoin

Let's discuss.

[ THREAD ]

Asset allocation is really just a fancy finance term for the mix of different asset classes (investment types) that you hold in your portfolio.

Some of those asset classes includes

- Stocks
- Bonds
- Cash
- Alternatives (Real estate, Gold, etc)

Your asset allocation can range from ultra-conservative to ultra-aggressive.

You have to consider what's most important to you.

If you're conservative, you won't receive a whole lot of growth.

If you're very aggressive, you'll have to be okay with risk.

The whole point of asset allocation is to provide you with diversification across assets classes so when one investment types suffers, your entire financial plan is not in jeapordy.

The larger your investment portfolio, the more more asset allocation matters.

You should put together an asset allocation that takes into account:

- Your tolerance for risk
- How much risk you can afford to take (how much time you have on your side )
- The amount of growth required to meet your future financial goal(s)

If you're serious about looking for companies to own, you need to figure out how the company fits into your overall asset allocation and investment strategy.

My current experience as investment coach I figured the largest value-add to clients is making sure they have a real financial plan and helping them stick to the investment mix that makes sense for them through ups and downs.

Focus on this in your investing.

I hope this helps.