With all the different types of investments available in the investing world, it is easy to see why most people only feel safe with stocks, bonds, and maybe real estate.
While these are great tools, there are actually MANY more choices which can help you invest safely.
I've found that grouping investments by their asset classes makes sorting through all your choices a little easier.
Sorting by asset class will also help you keep investment instruments with similar "correlations" together.
Correlation is an important concept when it comes to asset allocation. Click here for more information.The following classifications will help you learn to organize by asset class.
Real Assets Real assets are the means of production for income and wealth.
Financial Assets Financial assets are issued by corporate entities, and represent claims to the income and wealth generated by real assets.
Derivative Contracts As the name implies, derivatives are contracts which represent rights of ownership for real and financial assets.
Insurance & Reinsurance Contracts
Insurance is a risk management tool that allows you to protect yourself from a loss.
View the original article here
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment