To prove our theory, we carried out a back-testing with just two asset classes -- equity and fixed income. Investment charter After realising the importance of asset allocation, the next step is to have an investment charter which will make the approach more robust. Make asset allocation that sturdy ship in your life that can help you sail through the most turbulent times. Maximising returns Asset allocation not only minimises an investor's risk, but also makes the returns more predictable and consistent. Based on your risk-taking appetite, one should decide on how much money one should allocate to different asset classes.

Source: The Telegraph July 03, 2016 22:52 UTC