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Principle of asset allocation
In our life, we may come into contact with many investment tools, such as national debt, bank financing, P2P, funds, gold and so on. But it is very likely that we will find it difficult to find a perfect product that is safe, profitable and convenient to buy and sell.

Income, risk and liquidity cannot have both, which is the classic "impossible trinity" in financial management. But is it really completely unavailable? Come to think of it, this "impossibility" is aimed at a single product. There is also a free cake in the investment: it can reduce the risk and improve your overall income. This is "asset allocation".

Speaking of "asset allocation", some friends may have heard the phrase "Don't put your eggs in the same basket". Simply put, I only buy one kind of wealth management products, including deposits, bank wealth management, funds, gold ... all kinds of wealth management products.

Therefore, a very important principle of asset allocation is to diversify investment. And this dispersion must be effective dispersion. Investing in P2P is not asset allocation.

Having said that, we might as well re-understand the asset allocation:

1? Broadly speaking, it is necessary to control the overall situation and make good asset allocation for your family. Investment and financial management is essentially to serve our lives, so that money can play its maximum value and get the highest income.

From this perspective, we need to match different assets according to our own goals and risk tolerance. For example, reserve cash, allocate insurance, arrange target reserves and so on. This part is what we often say about family asset allocation.

2. In a narrow sense, asset allocation mainly focuses on the investment itself, and mainly discusses specific investment strategies, which can help us improve our income and reduce the risks in investment.