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Asset Class

   Also found in: Wikipedia 0.03 sec.
Asset Class
Different types of investments that behave similarly and are subject to most of the same market forces. Many analysts believe that there are three main assets classes: equity securities or stocks, fixed-income securities or bonds, and cash equivalents. Some analysts would also include commodities, real estate, and derivatives. Including a variety of asset classes is important to constructing or maintaining a diverse portfolio.

asset class
A category of investments, such as cash, near money, common equities, fixed income, international equities, and so forth.

Asset class. Different categories of investments are described as asset classes. Stock, bonds, and cash -- including cash equivalents -- are major asset classes. So are real estate, derivative investments, such as options and futures contracts, and precious metals.

When you allocate the assets in your investment portfolio, you decide what proportion of its total value will be invested in each of the different asset classes you're including.



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The amount of exposure to each asset class should depend on your underlying attitude to investment risk and also your objectives for your investment.
Each asset class was examined from a risk-return perspective and the results indicate investors would gain considerable diversification benefits from adding both Australian and global property securities to their traditional equity and bond portfolios.
However, at times it becomes difficult to forecast which asset class is the most ideal for investing at a particular point in time.
 
 
 
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