Asset Class Definition
Asset classes are securities with similar features and financial structure. These securities are also held to the same laws and regulations. The most common asset classes are stocks, bonds, and cash equivalents.
List of Asset Classes
The main asset classes include the following, however these are not the only asset classes.
- Cash and Cash Equivalents
- Bonds or Fixed Income Investments
- Alternative Investments
- Global Markets
- Real Estate (REITS)
- Global Fixed Income
Why is It Important to Understand Asset Classes?
Considering asset classes generally adhere to the same financial structure, rules, and regulations, they’re also likely to perform similarly in the market. Diversifying your assets among different asset classes can help prevent you feel the negative impacts of volatility.