Asset allocation depends on your goals, your attitude to risk, your capacity for loss and market conditions. Understanding investment risk and determining what level of risk you feel comfortable with before you invest is an important part of the investment-decision process. Potential returns available from different kinds of investment, and the risks involved, change over time as a result of economic, political and regulatory developments, as well as a host of other factors.
The impact of inflation on savings and investments, especially of those retirees living on a fixed income, is an important issue. But it’s also not good news for other savers and investors, as it can erode the purchasing power of money.
