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What is the difference between asset allocation and diversification?
A) Diversification is much more important than asset allocation in an investment strategy.
B) Asset allocation and diversification are the same.
C) Asset allocation is about risk and diversification is about reward.
D) Asset allocation is the types of investments you choose, diversification is how you spread your investments within each investment type.

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Martebi

The difference between asset allocation and diversification is that Asset allocation is the types of investments you choose, diversification is how you spread your investments within each investment type.

What is the difference between asset allocation and diversification?

Asset allocation is known to be the percentage of stocks, bonds, and other form of cash in a person's portfolio, while diversification entails the act of spreading one's assets in all of one's asset classes within the given three buckets.

Therefore, The difference between asset allocation and diversification is that Asset allocation is the types of investments you choose, diversification is how you spread your investments within each investment type.

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