Anchor Text Optimization
Anchor text is the text you see associated with text links from a web page. From a search engine optimization perspective they are very important for the following reasons and should be optimized.
1. The anchor text passes SEO benefit to the page the link is pointing to, what this means is if you are linking to a page about Anchor Text the anchor text would ideally use the words "Anchor Text". It really is that simple.
2. Anchor text is considered more important than body text on the page the link is on. So the example link above not only helps the page it is linking to with regards the Anchor Text SERPs, but also the page you are reading right now. Yes, by linking out to relevant pages it helps your page as long as you use relevant anchor text, this also means if you link out from a page about Anchor Text and use unrelated text to a degree harms the pages Anchor Text SERPs.
3. For internal links anchor text adds relevance to your internal linking. Many internal web pages only have internal backlinks, this means you are in complete control over what the search engines 'see' via your internal linking, don't waste your anchor text on works like "click here", "home page" etc... unless those re relevant phrases to your site.