Asset allocation means...

Splitting money across asset types

Bringing each part back to its target

Who can usually hold more growth assets?

Someone saving for 30 years from now

Before picking any single investment, there's a bigger question: how much goes into safe assets and how much into growth assets? That split in your portfolio is your asset allocation.
Your timeline matters most. Money you won't need for 20 years can ride out drops, so it can hold more growth assets, like stock funds. Money for next year can't.
In 2008, US stocks (the S&P 500) lost about 37%, while US bonds gained about 5%. A mix of 60% stocks and 40% bonds lost about 20%: painful, but far less.
An emergency fund and money for the next year or two usually sit outside the mix, in safe places like savings accounts or deposits.
Markets slowly push your mix off target. Once a year, many investors rebalance: they bring each part back to the split they chose.
Common mistake
Myth: “There's a perfect mix and I must find it.” A simple mix you can stick to in a crash beats a clever one you abandon in a panic.
Key takeaway
Asset allocation is how you split money between safe and growth assets. Your goal and your timeline decide the split, not today's news.

Asset allocation means... Splitting money across asset typesAsset allocation is the big decision about how much goes to safe and growth assets, before you choose single products.
Rebalancing means... Bringing each part back to its targetAs markets move, your mix drifts. Rebalancing sells a little of what grew and buys what lagged, back to the target.
The best plan is one you can... Stick to in a crashMany losses happen when people panic and sell at the bottom. A realistic plan helps you hold on.
Who can usually hold more growth assets? Someone saving for 30 years from nowA long timeline gives you years to recover from drops. Money needed soon can't wait for a recovery.