To determine:
The difference between asset allocation and security selection
Introduction:
Assets are resources which have some economic value and which can be converted into cash in the future. These resources are owned or controlled by individuals or corporations or country so that it could provide benefits for the owner in the future. Companies generally benefit in some way or the other by using or owning assets.
Portfolio is the collection of investment assets. The investors rebalance the portfolio. To buy new securities, investors sell old securities or add additional investment. Investors could also wish to decrease their portfolios. They could do so by selling securities. For portfolio creation asset allocation and security selection are important.
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