At the core of a robust investment strategy is a thorough asset allocation. Asset allocation is paramount because it is the blueprint for your investment strategy, determining the balance you maintain among various asset classes such as equities, fixed income, or private equity. Your portfolio returns depend mainly on your asset allocation. Generally, studies show that around 80% of your portfolio returns are linked to your asset allocation. Asset classes like fixed income or real estate are less volatile and provide predictable incomes whereas equities are more volatile but provide higher returns in the long term.