Financial Planning for LifeĀ 

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Address:

San Antonio Offices:
18756 Stone Oak Pkwy, Ste 200
San Antonio, TX 78258
Phone: 210.998.5608
Fax: 210.855.3252

17803 La Cantera Terrace, Suite 7101 
San Antonio, TX  78256
Phone: 210.686.9000
Fax: 210.855.3252

Austin Offices:
1250 Capital of Texas Hwy S.
Building 3, Suite 400
Austin, TX 78746
Phone: 512.329.1940
Fax: 888.600.7671

9442 North Capital of Texas Hwy
Plaza One, Ste 500
Austin, TX 78759
Phone: 210.240.1689    
Fax: 888.600.7671 
 
Fair Oaks Ranch Office:
8000 Fair Oaks Pkwy, Suite 104
Fair Oaks Ranch, TX 78015
Phone: 210.530.1270
Fax: 888.600.7671

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Classes of Assets

What Are the Different Classes of Assets?

When it comes to investing their money, many people are content to take a random approach. They may have received a hot tip for a particular investment and decided to plow a large amount of money into it with no regard to the overall balance of their portfolios. However, research has shown that it is through the careful selection of the various asset classes, rather than the individual investments themselves, that people prosper financially. Therefore, the careful selection and distribution of your investments among the various asset classes is likely to prove crucial to the future success of your investment portfolio.

There are five broad asset classes that you should take into consideration when constructing your investment portfolio.

Cash refers to the most liquid holdings in your portfolio. This asset class includes the balance in your checking account, money market account, and certificates of deposit. Conventional wisdom holds that you should keep three to six months’ salary in cash to cover yourself in the event of an emergency.

Fixed-principal investments are those that do not put your principal at risk due to market forces. Fixed annuities and trust deeds fall into this category.

Debt makes up the third asset class. It includes municipal, corporate, government, and government agency bonds. It also covers other debt-secured investments such as collateralized mortgage obligations.

Equity represents an ownership interest in a business entity; this class covers any investment you might make in stocks. It also covers any interest you may have in a closely held corporation or partnership.

Tangibles include your holdings in real estate, art, gold, precious stones, stamps, baseball cards, or other valuable collector’s items.

How you choose to distribute your investments among the various asset classes depends on your goals, your risk tolerance, and your expected rate of return. Keep in mind that asset allocation does not guarantee a profit or protect against loss; it is a method used to help manage investment risk. All investments are subject to market fluctuation, risk, and loss of principal. When sold, investments may be worth more or less than their original cost.

 

The information in this newsletter is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Broadridge Advisor Solutions. © 2018 Broadridge Investor Communication Solutions, Inc.

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