Asset allocation is when an investor divides their portfolio amongst various asset classes into percentages based on their individual time horizon and risk appetite. It used to be quite normal for one to diversify their portfolio and maintain a “buy & hold” strategy with the occasional re-balancing. However, this old style diversification that once was instrumental in reducing volatility risk has become harder and harder to achieve due to global markets which often move in sync with each other more and more over the last decade.