Is This The Big Factor Behind Investment Returns That Most Of Us Neglect?

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Investing and creating the “perfect portfolio” is always on the mind of serious investors. Focusing on this one key factor in your investments may be the biggest reason for success or failure.

This idea of the ideal portfolio does not exist. Some portfolios and investments may look awesome in bull markets. Once the markets turn, those portfolios can get clobbered. See this year’s news on the ETF ARK if you don’t believe me.

The volatility of markets and the economy makes many people abandon their investing strategies. They’ll try to follow the news and “time” markets. This can work at times in the short run. But most investors will keep chasing and changing investment styles. They will most likely underperform in the long term.

What exactly is this important factor that most investors forget about?

Asset allocation is the often-neglected important factor that is underestimated by most investors.

Here is Wikipedia’s definition of asset allocation.