Definition
Asset allocation is the strategy of distributing investment portfolio across different asset classes. Founders reach for it when a vague conversation needs a shared, specific meaning. Name it clearly, then let the next decision — a hire, a price, a test, or a pass — follow from that meaning.
In the room
How the word shows up in a real conversation.
Two cofounders disagree until they define Asset allocation. Once they agree it means “Strategy of distributing investment portfolio across different asset classes”, the argument becomes a decision.
Common mistake
Using Asset allocation as a label instead of a fact. If you cannot point to the evidence — a number, a customer, or a written assumption — you are using the word as jargon.
See also
Asset class
Group of investments with similar characteristics and risk-return profiles.
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Asset management
Professional service of overseeing and optimizing investment portfolios.
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Asset turnover
Financial ratio measuring how efficiently a company uses assets to generate sales.
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Asset-backed security
Investment security backed by a pool of underlying assets like loans or receivables.
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