Think of investing, and people tend to think of stocks. But there’s a whole range of different asset classes that you can invest your money in. Indeed there are several different categories of stocks. In the first in an occasional series exploring the basics of investing, we’re going to take a look at the main options open to you.
STOCKS AND BONDS
Although there are several different types of asset — or asset classes — the most important ones for the vast majority of individual investors are stocks (otherwise known as stocks or equities) and bonds (sometimes referred to as fixed income).
When you buy stocks, you are literally buying a small part of a business. You become a co-owner of that particular firm.
Your returns come in two different forms — first, any increase in the share price on t
The final asset class — usually called alternatives — principally includes property (residential and commercial), commodities, hedge funds and private equity funds.
Some would also include in this category art, classic cars and fine wines.
All of these alternative investments are attractive in their own way, but they all have disadvantages too.
Of course, residential property has for many years been a very popular investment and, on the whole, it has delivered strong returns. What you need to remember, however, is that if you own or have a mortgage on your own home, you are already heavily exposed to residential property as an asset class.
Whether your goal is to accumulate, preserve or optimize your wealth, having the right mix of assets and liabilities is critical to maximizing your probability of a successful outcome.
Source: Regus Media. https://www.credit-suisse.com/about-us-news/en/articles/news-and-expertise/global-investment-returns-yearbook-201902.html