Asset Class Investing

All the basic asset classes such as stocks, bonds and cash investments have specific characteristics of risk and return. These stocks can be grouped and assessed on their capitalisation and performance as either growth or value assets. For example, a small capitalisation company usually carries a higher risk compared to a large capitalisation company. This is because the former tends to be not as well-known or established as the latter.

Cash investments

Furthermore, a large capitalisation company generally has a steadier source of profit and income when compared to a small capitalisation company. On the other hand, bonds are usually evaluated on the quality of the borrower and the length of their maturity.