Invest in yourself. Spend intentionally. Invest your money.

Invest in yourself. Spend intentionally. Invest your money.

asset class

An “asset class” is a way to group assets whose price growth or income-producing capability all work in the same way. I try to own a few different classes.

Ideally, you would want different asset classes that work in opposite directions – that have a negative price correlation.  That means that when one drops in value, the damage to your portfolio is counterbalanced by the other one increasing in value.

Asset class is a useful tool for working out if you’re diversified.  Diversification spreads out risk (see my post on it!).  It’s easier to plan this if you think in terms of asset classes.

Good examples of asset classes are: “real estate”, “equities”, “debt securities” (e.g. bonds), “cash”, and “commodities”.  Maybe “crypto” if you’re adventurous.

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