Definition
Asset allocation is the planned division of a portfolio among asset classes according to an investor’s objectives, time horizon, and risk constraints.
In market context
Allocation decisions determine how much of a portfolio is exposed to categories such as cash, stocks, funds, commodities, or cryptoassets. Because asset classes respond differently to economic and market conditions, allocation often influences overall risk more than any single holding. The mix may need periodic rebalancing as prices move or circumstances change, but diversification and rebalancing cannot prevent losses in practice.
Source
Use the primary source for fuller regulatory or market context.
