What is an asset class in investing?

An asset class is a way to categorize different types of investments with similarities. Types of asset classes include: stocks, bonds, Cash equivalents or money market vehicles, real estate, commodities, and cryptocurrency. Asset classes each accomplish different goals that can align with the goal of your portfolio. What is an asset class?

Why should you choose a different asset class?

The choice of asset classes is a key decision for investors because they carry very different levels of potential risk and return, even before the risk/returns within each asset class can be weighed up. Equities and bonds are higher risk assets than cash but they also offer the potential for much higher returns, for example.

Which asset class is the most quoted?

Equities (stocks), bonds (fixed-income securities), cash or marketable securities, and commodities are the most liquid asset classes and, therefore, the most quoted asset classes. There are also alternative asset classes, such as real estate, and valuable inventory, such as artwork, stamps, and other tradable collectibles.

What are alternative asset classes?

Categories outside of the main asset classes are known as alternative asset classes. These include, for example: Real estate: Owning your home is an investment in real estate but commercial properties also offer investment opportunities.