Types of Investments: Asset Classes

Types of Investments:
Asset Classes

Types of Investments: Asset Classes

Each asset class behaves differently—know the building blocks of a balanced portfolio.

An asset class is a group of financial instruments with similar characteristics and behavior in the market. Diversifying across asset classes helps reduce overall risk.

Stocks:

-Ownership in companies

-High potential returns

-High volatility

Bonds:

-Loans to gov. or companies

-More stable

-Pays Interest

ETFs:

-Baskets of assets

-Passive

-Diversified

-Cost effective

Real Estate:

-Tangible properties

-Generates rent

-Potential appreciation

Crypto:

-Digital assets like Bitcoin

-High risk, unregulated

-High volatility

Stocks:

Ownership in companies
High potential returns
High volatility

Bonds:

Loans to gov. or companies
More stable
Pays Interest

ETFs:

Baskets of assets
Passive
Diversified
Cost-Effective

Real Estate:

Tangible properties
Generates rent
Potential appreciation

Crypto:

Digital assets like Bitcoin
High risk, unregulated
High volatility

Sample Portfolio Diversifications:

Classic 60/40 Portfolio: 60% stocks, 40% bonds
Permanent Portfolio: 25% stocks, 25% bonds, 25% gold, 25% cash
Ray Dalio All-Weather Portfolio: 30% stocks, 40% long-term bonds, 15% intermediate bonds, 7.5% gold, 7.5% commodities

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