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The 4 Major Asset Classes

JF

Jeremy Fielder

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Table of contents

1) Equities2) Fixed Income3) Commodities4) Currencies​5) Honorable mentions6) Conclusion

Equities

Equities, also known as stocks, are ownership stakes of a company in the form of shares. Although equities can be riskier, they are often more rewarding. Equities can benefit when the economy grows or slows depending on the equity.Examples

  • $SPY
  • $QQQ
  • $AAPL
  • $GOOG
  • $TSLA
  • $FB
  • $MSFT
  • $AMZN

  • $NFLX

Fixed Income

Fixed income markets deal with debt instruments that payout interest payments to the investors over the duration of the loan. Fixed-income instruments are meant to fund growth for a business by receiving cash from investors in return for interest payments to the bond buyers. Bonds are backed by collateral such as a house, equity, or the government's promise. Fixed income is less risky but also less rewarding.Examples

  • Treasury Bonds
  • Annuities 
  • Corporate Bonds
  • Municipal Bonds
  • Mortgage-backed securities
  • *Real estate 

Commodities

Commodities are comprised of four basic tenets. #1 Base metals to build the economy. #2 Energy to power the economy #3 Agriculture to feed the economy and #4 Precious metals as a form of money.Example:

  • Lumber
  • Aluminum
  • Copper
  • Steele
  • Oil
  • Natural Gas
  • Corn
  • Rice
  • Wheat
  • Sugar
  • Coffee
  • Gold
  • Silver

Currencies

Currencies are instruments of accounting and exchange to facilitate the transfer of value. Currencies are the largest and most liquid asset class, trading between $6-$7 trillion a day. Currencies are the vehicles that facilitate all asset investment.

  • Dollar
  • Yen
  • Euro
  • Yuan
  • Pound Sterling
  • Swiss franc

Honorable mentions:

Real Estate

 is the largest illiquid asset class by market cap. It's unique because it is a combination of equity and fixed income.​

  • Residential real estate
  • Commercial real estate
  • Industrial real estate
  • Land real estate

Crypto

 assets are an emerging asset class that can revolutionize everything of value, much like the internet. Crypto is unique because it's a combination of currency, commodity, equity, and fixed income.

  • Bitcoin

  • Ethereum

  • Cardano
  • Polkadot
  • Uniswap
  • Tether
  • DIA
  • Chainlink

Conclusion

  1. Equities are ownership businesses that create value and allow public ownership.
  2. Fixed income allows businesses and countries to grow and invest in new projects without giving up ownership. 
  3. Commodities are the building blocks of the physical world and the products we consume. 
  4. Currencies are the vehicles to facilitate it all. 
  5. Crypto assets are an emerging asset class with lots of potential.