Investing: Asset classes animation

Written and accurate as at: 20 May 2021

The process of clarifying what your financial goals are is an important part of goal-setting. It can help frame where you want to see yourself in the future and the path to take to make it a reality.

With this in mind, we all tend to invest in either one or more of the different types of asset classes to help achieve our financial goals. The four main types of asset classes are cash, fixed interest, property, and shares.

Importantly, each of these asset classes (and their sub-asset classes) has unique characteristics, including categorisation, focus, liquidity, expected rate of return, returns, risk level, and time horizon.

And, having an appropriate understanding of these asset classes and what to expect from each of them can help with making an informed decision as to which to invest in to help achieve our financial goals.

With the above in mind, this animation illustrates the unique characteristics of each asset class. Please note: This is a general overview. The details are often not standard across the board, which can be due to the unique characteristics of ‘sub-classes’, and the chosen underlying individual investment itself.