Explore commonly used personal finance terms.
An asset class is a category of assets with similar characteristics and market behavior, such as stocks, bonds, or real estate. Each asset class carries different risk and return expectations, making them suitable for different investment strategies. Diversifying across asset classes can help investors manage risk, as some asset classes may perform well while others underperform under the same economic conditions. Understanding asset classes enables investors to create balanced portfolios that align with their financial goals.
