Finance

An asset class is a group of securities that have similar financial characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations.

• Equities
• Fixed income
• Money market

Also called stocks, equities represent shares of ownership in publicly held companies.

• Historically have outperformed other investments (keep in mind that past performance does not guarantee future results)
• Most volatile in the short term
• Returns and principal will fluctuate so that accumulations, when redeemed, may be worth more or less than original cost

Fixed income, or bond investments, generally pay a set rate of interest over a given period, then return the investor’s principal.

• Set rate of interest
• More stability than stocks
• Value fluctuates due to current interest and inflation rates

Money market investments are relatively safe, liquid short-term investments; examples include: government issued securities, CDs, banker’s acceptances, euros and commercial paper.

• Less volatile than stocks and bonds
• Lower potential for growth
• Short-term investment

• Equities (i.e. stock)
• Dept (i.e. bonds and mortgages)
• Derivatives

• Forwards
• Futures
• Options
• Binary options
• Warrants
• Swaps

A derivative is a financial contract between two parties that specify conditions under which payments are to be made between the parties.