Asset allocation supplements the investment strategy in that it balances the reward versus the risk. This is done by adjusting the percentage of each asset in the investment portfolio according to the investor's goals, expressed in terms of time frame, opportunity set and risk tolerance.
The portfolio allocation is frequently designed around the investor's return-to-risk (reward versus risk) tradeoff. While some investors will prefer to maximize expected returns by investing in risky assets, others will prefer to minimize risk by investing in safe assets. In practice, most investors select a portfolio allocation that is somewhere in between.