Glossary · PSX term

Asset allocation.

Asset allocation is how you divide your money across asset types like stocks, bonds, and cash.

Definition

Your allocation is one of the biggest drivers of long-term risk and return, and it should fit your goals and risk tolerance. Investors often rebalance back to target weights as markets move.

Worked example

A balanced investor might hold 60% stocks, 30% bonds, and 10% cash, adjusting over time.

Related on PSX Clarity

Portfolio rebalancing

Term

Concentration risk

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Annual General Meeting (AGM)

An AGM is the yearly shareholder meeting where investors vote on accounts, dividends, and directors.

Asset Management Company (AMC)

An AMC is a licensed firm that creates and manages mutual funds and other investment products.

Accruals

Accruals are revenues and expenses recorded when they are earned or incurred, not when cash moves.

Anchoring

Anchoring is fixating on one reference number, like your purchase price, when making decisions.