While diversification is the action of spreading investments among various securities... putting your eggs in different baskets, asset allocation is the practice of placing a percentage of the portfolio in each of various investment classes ... putting the right number of eggs in each basket.

Research shows that asset allocation is responsible for 91.5% of the variation in portfolio performance. Brinson, Singer & Beebower, "Determinants of Portfolio Performance," Financial Analysts’ Journal, May-June 1991.

Asset allocation and diversification cannot guarantee profit or insure against a loss. There is no guarantee that any investment strategy will be successful; all investing involves risk, including the possible loss of principal.