According to Wikipedia, asset allocation is the implementation of an investment strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to the investor’s risk tolerance, goals and investment time frame. The focus is on the characteristics of the overall portfolio. Such a strategy contrasts with an approach that focuses on individual assets.
In today’s world, days of the traditional asset allocation model of 60/40 stock and bond mix is gone. We should always look at the overall gain vs loss ratio, (Sortino Ratio) vs just the absolute return regardless of the risk taken.