Asset allocation is how your money is divided across broad categories — shares, bonds, cash, property — rather than which specific holdings you pick inside each one.
Studies of portfolio behaviour consistently find that this split explains far more of the variation in returns over time than individual selection does. In practice it is driven by two things: how long until you need the money, and how much fluctuation you can tolerate without abandoning the plan. An allocation you can hold through a bad year beats a theoretically superior one you abandon in the middle of it.