What are different types of investment assets?

There are many classes of investment assets that are further divided into subclass. The main classes of investment assets are cash, solid income, alternatives and stocks. Cash subordinate class is cash equivalents. Fixed income subclass includes corporate, state and municipal bonds. Alternatives include real estate and commodities and shares are divided into large caps, medium caps, small caps and developing markets.

Due to its safety, cash for conservative investors is the most recommended asset class. Since investing is associated with a compromise between risk and return, cash has the lowest return on all these classes of investment assets. Cash equivalents include investments such as deposit certificates. These apply higher interest rates than normal savings accounts.

In the class with fixed income class, corporate bonds are debt instruments issued by the company as one of the funds of financing their activities. Similarly, government issues bondsSY, references to cashier bonds to raise funds. Municipalities also issue bonds for the same reason that are known as municipal bonds. Moreover, a fixed -income class is one of the safer investments after cash. Some bonds can also be attractive for conservative investment.

alternative classes, such as real estate, carry more risks than investment in cash and solid income. Investors in this class expect higher returns. The alternative class is also home to commodities. These include oil, heating oil, natural gas, copper, wheat, soybeans and precious metals such as gold and silver. Commodities can be very risky investment; Therefore, this class is usually avoided by most investors with risks.

of all investment assets are considered to be the most risky and therefore have the potential for the highest revenue. There are large caps in this classStocks of large publicly traded companies with a restriction of more than $ 10,000,000,000 in the US (USD). The middle caps are essentially medium -sized companies with a ceiling between $ 2,000,000,000 and $ 10,000,000,000. Small caps have a cap below $ 2,000,000,000. It is important to note that CAP is short for capitalization, which is calculated by multiplying the current stock price by the total number of unpaid shares.

In addition, in the stock class is a subclass developing market. This consists of shares from companies in developing countries. The spectrum from safe to risky shares developing on the market is considered a risky end. So when they work well, they can generate substantial returns.

Furthermore, the understanding of the characteristics of various classes of investment assets can be beneficial for portfolio management. Therefore, the portfolio managers are trying to combine the right combination of assets in the portfolio to achieve the best results. At the same time, the risk significantly reduces the correct combination of assets.