Types Of Asset Classes
There are many assets that you can invest in. It’s important to understand the different types of asset classes. To have a wealthy diversified portfolio, it is essential that you know which assets belong to which class.
An asset is valuable resource that can be converted into cash. Like a property, stocks and others.
An asset class is a group of assets that share similar attributes. Their maybe subject to the same financial down turn and up turn. They may share similar regulations and rules.
A diversified Portfolio is a group of different investment with the purpose to reduce the overall risk. You can diversified with different investment within an asset class. You can Also diversified with different investment with different asset classes.
Types of Asset Classes
Cash
Liquidity and wealth to buy anything.
Examples like Hard cash, saving or checking accounts, liquid funds, online wallets
Equity
Business ownership or Investing into a business.
Examples like ETF’s, Index funds, stocks, equity mutual funds, start up funding
Fixed Income
Lending money to someone.
Examples like recurring deposits, fixed deposits, bonds, debt funds, mutual funds, debentures, endowment policies, EPF – PPF – NSC, Post office products.
Commodities
Goods ownership with an end issued.
Example likes Gold, silver, Copper, Wheat, Corn, Crude Oil
Real Estate
Physical Space ownership.
Example like Properties, commercial properties, REIT, flats, plots,
A good portfolio may have investment in different type of asset classes such as , equity, fixed income , commodities and real estate.