Asset allocation is the most important determinate of investment performance.
The decision to put money into stocks than bonds, for example, has far greater impact on returns than the decision to pick one stock over another. The term asset allocation can have different contexts. The goal of this asset mix is to achieve the investor's long-term objectives. Asset allocation policy reflects the investor's attitudes about risk and return. Active Asset Allocation is a strategy designed to enhance the performance of a portfolio by shifting its asset mix systematically.