What are the potential benefits of asset allocation?
Variable annuities allow you to easily diversify your investment among stocks, bonds, and money market portfolios. Many economists including three 1990 Nobel prize winners have shown that by diversifying assets, including the addition of some riskier assets, a portfolio has the potential to obtain the highest return potential for each asset class, and do it with a lower level of risk than the portfolio’s assets would achieve separately. Of course, asset allocation does not protect against a loss.
