You would not suspect this given today's turbulent markets environment, but asset allocation actually does work. This much we know --markets are unpredictable in nature, and stock prices are random in their behavior. We also know that market risk can never be eliminated, but certain other risks can. In the world of finance, we separate those risks into two categories, systematic (undiversifiable market risk) and unsystematic risk (ie. company risk, industry risk). Our job as investors, or my job as a financial planner, is to structure portfolios designed to meet a  client's specific financial goals and risk preferences. While no "perfect" portfolio exists, many investors will find that a sensible approach incorporates diversification across multiple sources of risk and return. This process is simply known as asset allocation, a concept that we will explore in this article.

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As Seen in Forbes Magazine

Cathy Pareto and Associates has been named one of the top 10  Most Dependable Wealth Management Firms for Women in the US by a third party research firm. The list was published in the June 17th 2008 issue of Forbes Magazine. Click here to view the full listing.