Investing when share prices are low will buy you more shares. By resolutely adding to your holdings in the midst of a bear market, you increase the number of shares you hold. The more shares you hold, the more you stand to gain when the next bull market comes along. The idea here is to distribute capital efficiently among diversified types of investments in a portfolio. The way to build a winning portfolio is to limit risk but still earn a satisfactory return on your investment.
Asset allocation is the process of selecting the very best mix of competing financial instruments.
Having an asset allocation strategy can minimize the blow of a market plunge. To use this technique, consult a financial planner who is qualified in asset allocation. He is a certified internal auditor and a registered investment adviser.