The process of asset
allocation involves choosing a portfolio by selecting combinations of
investments to meet your specific needs and goals as an investor. This is done
by dividing the portfolio among different asset classes. The five main asset
classes that make up a typical portfolio include:
1. Stocks: Stocks represent equity
or ownership in a business or company. If you own stock in a company, you own a
piece of that company. Stocks have historically produced the highest returns.
However, they also carry the most risk, with a tendency towards greater price
swings – highs and lows – that makes them more volatile than either bonds or
other debt instruments.



