What are the different asset classes for portfolio investment?

Common asset classes for portfolio investment include stocks, bonds, cash equivalents, real estate, commodities, and alternative investments like cryptocurrencies, private equity, or hedge funds. Diversification across different asset classes and geographic regions is an important strategy to manage risk and potentially improve returns.

What are real assets?

Real assets are investments in assets through direct ownership, and not via financial assets (e.g., stocks). Natural resources, commodities, real estate, infrastructure, and intellectual property are the most prevalent real assets. Examples of natural resources are water and timber.

What are the three main asset classes?

Historically, the three main asset classes have been equities (stocks), fixed income (bonds), and cash equivalent or money market instruments. Currently, most investment professionals include real estate, commodities, futures, other financial derivatives, and even cryptocurrencies in the asset class mix.