Asset Allocation is the process of dividing investments among different asset categories, such as stocks, bonds, and cash, to balance risk and reward according to an investor’s goals, time horizon, and risk tolerance. AI tools like Orion AI can optimize asset allocation by analyzing historical market data, economic forecasts, and individual investor profiles. Dynamic asset allocation strategies can adjust in real-time based on changing market conditions or macroeconomic news. Effective allocation is crucial for portfolio performance, as it has a greater impact on returns than individual security selection. AI’s role in asset allocation lies in its ability to simulate thousands of portfolio scenarios quickly, identifying the most resilient strategies under different market conditions.
