Asset Classes
An asset class is a grouping of investments that exhibit similar characteristics and are subject to the same laws and regulations.
Equities (e.g., stocks), fixed income (e.g., bonds), cash and cash equivalents, real estate, commodities, and currencies are common examples of asset classes.
There is usually very little correlation and in some cases a negative correlation, between different asset classes.
Financial advisors focus on asset class as a way to help investors diversify their portfolios.
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