This form of diversification can help maximize your potential returns while managing your exposure to risk.
 The distribution ratio of different asset classes in a portfolio can affect performance more than any other factor. |
One study found that asset allocation can account for over 90% of a portfolio’s performance*. Market timing (buying and selling an investment at the most favourable time) and selection of individual securities can account for less than 10% of a portfolio’s performance.
Asset allocation helps reduce the risk that’s inevitable when you put all of your investments in one asset class. For example, when bonds are not doing well overall, stocks may be doing well. A portfolio made up of any one type of security - stocks, for instance - may make an investor overly vulnerable to changes in that market
* Based on a study by Brinson, Singer and Beebower entitled "Determinants of Portfolio Performance II : an update", published in the May/June 1991 Financial Analysis Journal.To find out how Citibank can help you to invest, send us your Personal Personal Investment Profile or set an appointment with us at your convenience. Or call our 24-Hour CitiPhone Banking on (65) 224 5757.