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Major asset classes

When determining how to diversify an investment portfolio, you should consider the variety of broad types, or classes, of investments that are available. Listed below are the general asset classes most frequently considered when designing a portfolio.

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Cash
  • Bank accounts, money market funds, CDs
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Stocks

Classified by:

  • Geography: domestic (U.S. only), global (includes U.S.), international (foreign only)
  • Company size: large cap, mid cap, small cap, micro cap
  • Style: aggressive growth, growth, value, income
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Bonds

Classified by:

  • Geography: domestic (U.S. only), global (includes U.S.), international (foreign only)
  • Type of issuer: government, municipal, corporate
  • Default risk: investment grade (lower risk), high yield (higher risk)
  • Time factor: long term, intermediate term, short term
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Real Estate
  • Your home, vacation property, rental property, real estate investment trusts (REITs)
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Other
  • Private equity, hedge funds, futures, options, foreign currencies, precious metals