Asset allocation is the deliberate mix of stocks, bonds, cash, real estate, and other holdings tailored to your goals, timeline, and risk tolerance. It's essential for retirement planning and everyday financial decisions.
Stocks represent company ownership and potential dividends; bonds are loans that promise repayment of principal and interest. Both serve different roles in portfolios and markets.
A practical guide for beginners: prioritize goals, an emergency fund, low-cost diversified investments like ETFs and index funds, and steady habits rather than get-rich-quick schemes.
Retirement calculators turn goals into action by estimating needed savings, illustrating compounding, and testing trade-offs. Use them with realistic assumptions, include fees and taxes, and consult an advisor for complex situations.