In finance, an asset class is a group of financial instruments that have similar financial characteristics and behave similarly in the marketplace. We can often break these instruments into those having to do with real assets and those having to do with financial assets.
What are the different asset classes?
The main asset classes are equities, fixed income, cash or marketable securities, and commodities. The most common asset classes are: Cash and cash equivalents represent actual cash on hand and securities that are similar to cash. This type of investment is considered very low risk since there is little to no chance of losing your money.
What is an asset class example?
Simply put, an asset class is a grouping of comparable financial securities. For example, IBM, MSFT, and AAPL are a grouping of stocks. Asset classes and asset class categories are often mixed together. There is usually very little correlation and sometimes a negative correlation among different asset classes.
