Asset Allocation and Diversification Benefits

With nearly a decade of experience in financial and asset management, Mario Delecce has worked for a number of major companies, including American Express Financial Advisors and Wells Fargo HSBC Trade Bank. Today, Mario Delecce oversees global operations for alternative energy investments as managing director of energy finance at Polaris Energy. His responsibilities include obtaining project financing, managing budgets, and guiding investment allocation of assets exceeding $1 billion.

Asset allocation is a practice in portfolio management that involves investing funds into various asset classes, for instance, stocks and bonds. In a volatile market, this reduces the risk of losing money invested and increases the potential returns. Diversification in asset allocation can be beneficial when balancing the effects of economic, political, and financial factors. While stocks may be negatively affected by political changes, mutual funds may benefit from such shifts. If the positive returns are significant, the portion invested into the mutual funds may offset losses suffered from stock investments and improve the chances of meeting financial goals sooner.