Appendix D
Asset classes
While there are hundreds of different types of investment, they all relate back to four main asset classes.
Cash
The simplest example of a cash investment is a bank account on which you earn interest. In this situation, you are lending money to an institution in return for interest payments. Generally, a cash investment has a short investment timetable and provides a stable, low-risk income.
Bonds
When you invest in bonds, you are lending to either the government or a corporation, usually for a set period of time at a set interest rate. Often, the higher the interest rate, the higher the potential risk.
Bonds vary from very safe to quite risky and most bonds do have a credit rating. The value of a bond will rise or ...
Get Money For Nothing: How To Land The Best Deals On Your Insurances, Cards, Super, Tax And More now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
