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What is Asset Allocation? Benefits of Asset Allocation.

Have you ever heard about Asset Allocation? — a smart way to distribute your investment money to create a diverse portfolio and make profits. In this blog post, KIS Prime will explore the concept and its significance for investors seeking a solid financial investment strategy.

What is Asset Allocation Benefit of Asset Allocation KIS Vietnam
What is Asset Allocation? The benefit of Asset Allocation

1. What is Asset Allocation?

  • Asset Allocation is the process of spreading your investment capital across different investment classes, such as stocks, bonds, and cash equivalents. The main goal is to achieve an optimal balance between risk and return based on individual financial goals, risk tolerance, and investment time horizon. 
  • For example, an investor may allocate 30% of their assets to stocks 40% to bonds and the remaining 30% to bank savings. This helps maximize profit opportunities from the stock market while minimizing risks compared to investing in other tools like cryptocurrency. 
  • Asset Allocation is a crucial part of investment strategy and can be adjusted over time depending on market dynamics and individual investor goals.

2. Benefits of Asset Allocation?

a. Diversifying Investment Portfolio and Risk Management: Allocate your money across various asset classes such as stocks, bonds, real estate, and cash: helps minimize risk by diversifying investments across various asset classes. This shields the portfolio from the negative impact of the poor performance of a specific asset.

b. Profit Optimization: This strategy allows investors to optimize profits by allocating investments based on market conditions and individual financial goals.

c. Adaptability to Market Volatility: Markets are dynamic, and Asset Allocation provides the flexibility needed to adapt to these changes. Regularly reassessing and adjusting the allocation helps maintain alignment with investment objectives in a dynamic environment.

d. Learning and Enhanced Understanding: Asset Allocation is not just an investment strategy; it is an opportunity for investors to learn about different investments and how they interact. This enhances knowledge and skills for making informed financial decisions.

3. Popular Investment Options in Vietnam 2024

 

Popular Investment Options in Vietnam 2024 (KIS Vietnam ETF)

 

Popular Investment Options in Vietnam 2024 (KIS Vietnam ETF)

Notes: 

  • For new investors, you only invest in what you truly understand. Research thoroughly on how assets work, what influences them, their growth potential, and how their values might change over time. At KIS Vietnam, our ETF is carefully created from stock portfolios for long-term growth. Our main aim is to make investing easy and secure for all investors, whether you’re a beginner or an experienced investor. The two main benefits of investing through ETF are simplicity and growth potential.

4. Asset Allocation in ETFs

  • ETFs typically allocate assets based on the stock groups in the index they track. This provides diversification for investors without the need to manage individual stocks. Investors can buy and sell ETFs like stocks on the stock market, offering high liquidity and flexibility.
  • Here are two main benefits of investing through ETFs:
  1. 1. Ease and Convenience: Investing is no longer complex. Investors only need to open a securities account to participate in ETFs that include potential stocks.
  2. 2. Growth Potential: ETFs focus on building portfolios with high growth potential, benefiting investors interested in the market’s long-term development.
  3.  The VFMVN Diamond ETF by KIS Vietnam (as of 30/11/2023):
Phân Bổ Tài Sản VFMVN Diamond ETF_KIS Vietnam
  • The main goal is to achieve diversification and mitigate risk by spreading investments across various asset classes. Asset allocation typically focuses on sectors such as industry, banking, real estate, etc.
  • ETFs regularly update asset allocation to reflect changes in the index or management principles. Asset allocation in ETFs provides simplicity and convenience for investors, offering an attractive option for those who want to participate in the financial market efficiently and conveniently.