An asset class is a group of securities that have similar financial characteristics. The primary asset classes are: equities, fixed income, money market, guaranteed, and real estate.
The table below provides an overview of each asset class.
|Primary Asset Classes|
|Equities||Also called stocks, equities represent shares of ownership in publicly held companies.|| |
|Fixed income||Fixed income, or bond investments, generally pay a set rate of interest over a given period, then return the investor’s principal.|| |
|Money market||Money market investments are relatively safe, liquid short-term investments; examples include: government issued securities, CDs, banker’s acceptances, euros and commercial paper.|| |
|Guaranteed||Guaranteed assets with a fixed rate and backed by the claims-paying ability of the issuing insurer.|| |
|Real estate|| |
Your home or investment property, plus shares of funds that invest in commercial real estate.
Most financial experts agree that some of the most effective investment strategies involve diversifying investments across broad asset classes like stocks and bonds, rather than focusing on specific securities that may or may not turn out to be "winners." Diversification is a technique to help reduce risk. However, there is no guarantee that diversification will protect against a loss of income.
The goal of asset allocation is to create a balanced mix of assets that have the potential to improve returns, while meeting your:
Being diversified across asset classes may help reduce volatility. If you include several asset classes in your long-term portfolio, the upswing of one asset class may help offset the downward movement of another as conditions change. But keep in mind that there are inherent risks associated with investing in securities, and diversification doesn’t protect against loss.
1 An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not deposits, are not insured by any federal government agency, are not a condition to any banking service or activity and may lose value.
TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC, distribute securities products.
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