GLOSSARY TERM
Asset Class
An asset class is a group of investments that share similar features. Common asset classes include stocks, bonds, cash and real estate.
What does this mean in practice?
Different asset classes behave in different ways. Stocks can offer stronger long-term growth, but their value can move up and down more. Bonds are often more stable, but their returns are usually lower. Cash is the most stable, but it may lose value over time because of inflation. By combining different asset classes, an investor can build a more balanced portfolio.
Example
If you invest in a global stock ETF, a bond fund and keep some money in cash, your money is spread across three different asset classes.
Why it matters
Understanding asset classes helps you see that not all investments work the same way. It makes it easier to build a portfolio that fits your goals, risk level and time horizon.
Continue your path
Ready for the next step? Follow the Start Here path.
Go to Start Here