Frank Roessler explained that although it may seem contradictory, many endowments and other major institutional investors allocate a sizable portion of their portfolios to real estate. It can protect a portfolio against price swings and boost returns in different markets, even those that have recently seen decreases.

If you still need to do so, you should diversify your portfolio by including real estate investments. These include protection from market volatility, less reliance on fluctuations in the stock and bond markets, and the opportunity for long-term price appreciation.

For investors who are wary of taking on too much risk or who have a limited amount of capital to invest, diversification is essential. You can feel safer making investing decisions and reduce the likelihood of suffering a catastrophic loss of wealth if your portfolio is well diversified.

Your portfolio's return should be sufficient for your needs, and the portfolio's risk should be within your comfort zone. This highlights the significance of asset allocation models, which must be customized to meet your needs and objectives.

You might be less willing to take on the dangers and volatility of equities, for instance, if you're preparing for retirement in your twenties. To lessen the impact of a stock market crash or another financial setback, you should also prioritize the early accumulation of risk-free assets, such as CDs and bonds.

However, when you become older, you'll be able to switch to a more aggressive stock allocation and quickly amass a sizable fortune. You need to take a more active role in your investments since a solid portfolio will provide you the flexibility to adjust your allocation in response to market changes and shifts in your financial objectives.

Before you turn 30, you should have a primary residence and put away at least 5 percent of your wealth in low-risk investments like CDs and bonds. If the market crashes or you run out of money before retirement, you can keep saving aggressively, knowing that your money is secure.

Many various asset allocation methods exist; pick one that works for you based on your goals and comfort level with risk. Learning about the different models available might help you discover the one that is most suitable for your personal circumstances and long-term investing objectives.

To determine the best asset allocation strategy for your situation and objectives, you can employ a robo adviser or work with a human, financial advisor. Both are more expensive than doing it yourself, but when you have an expert on your side, you know you're making the best decision.

You may rest assured that a robo adviser will employ a predetermined allocation strategy that takes into account your risk profile and other relevant considerations. However, a financial counselor may be the preferable choice for those with a high net worth or a complicated financial situation.