MONEY OBEDIENCE

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A conservative asset allocation tries to balance the various risks so that exposure to any one kind of risk is not too large. This type of allocation puts a special focus on avoiding market risk.

For example, perhaps you feel comfortable assuming purchasing power risk or the risk that you may not reach your financial goals. In that case, you do not want to assume much more additional risk by putting money into things like the stock market ("market risk"), even if this additional risk would limit your exposure to these other risks. Sometimes, too much caution prevents one from taking advantage of situations that could turn out to be positive in the long run.