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Which of the following would not be a good method of asset allocation?

A) Restrict your portfolio to stocks
B) Include bonds
C) Include real estate
D) Include mutual funds

User Jgonian
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1 Answer

3 votes

Final answer:

The answer is A) Restrict your portfolio to stocks because it lacks diversification.

Step-by-step explanation:

The answer to the question is A) Restrict your portfolio to stocks. This would not be a good method of asset allocation because it lacks diversification. When constructing an investment portfolio, it is important to spread out your investments across different asset classes to minimize risk. Including bonds, real estate, and mutual funds, along with stocks, allows for better diversification and reduces the impact of any single asset's performance on the overall portfolio.

User Rik Van Den Berg
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