Asset Class
An asset class refers to a group of financial instruments with similar characteristics, risk profiles, and behaviors. Common asset classes include equities, bonds, real estate, and alternative investments. Understanding asset classes is essential for portfolio diversification, as different asset classes often perform differently under varying market conditions. This helps investors balance risk and achieve their desired returns.
Key Takeaways
- Group of investments with similar characteristics.
- Includes equities, bonds, real estate, and alternatives.
- Key for portfolio diversification.
- Helps manage risk and optimize returns.
