Asset Class

Asset Class Meaning:
In financial terminology, the term Asset Class refers to a type of investment. Four major classes of assets exist as follows: stocks, cash, bonds and tangible assets like real estate or gold.

Asset Class Example:
For example, if an investor seeks to diversify their portfolio, they might choose to acquire investments from a different Asset Class to what their already hold in their portfolio. Hence, if they already hold stocks in their investment portfolio, they might add some bonds and some tangible assets like real estate or precious metals to their holdings to diversity among different Asset Classes. They could also elect to maintain some funds in cash instruments or certificates of deposit that would provide them with more liquid funds in the case of emergencies or if a highly attractive investment opportunity was to present itself that would require an urgent investment of funds.