Asset allocation is theoretically the best way to control the return you experience, through diversification and rebalancing.
Asset allocation theories provide you with mechanisms to diversify your money among various asset classes, such as stocks, bonds, real estate, commodities, precious metals, etc.
The benefit of asset allocation is twofold: first, nobody knows which asset class will perform better at any given time, and second, various asset classes are not entirely correlated or have a negative correlation, which provides a hedge. If one asset class appreciates significantly, the other might not, but, if the allocation is done correctly, this may be exactly what the investor was looking for.
If a lot of growth and upside potential is desired, a larger proportion of the allocation should go toward growth instruments, and vice versa. Rebalancing will keep the investor from becoming top-heavy or exposing too much of their assets to risk: periodically the gains will be distributed among the more conservative asset classes and thereby will be preserved.
Large financial institutions and pension funds constantly update and maintain their asset allocations, and Tickeron can help you do the same.
How Often Do I Need to Rebalance My Portfolio?
Is Successful Asset Allocation an Art or a Science?