Do you have experience in investing? If investing attracts you - read my article about asset classes and you will have a better understanding in it!
What are the asset classes and “risk ladder”?
An asset class is a group of financial instruments which have similar financial characteristics and behave similarly in the marketplace.
Risk ladder analyses asset classes relative riskiness, with cash being the most stable and alternative investments - the most volatile.
Here are the major asset classes, in ascending order of risk, on the investment risk ladder.
A cash bank deposit is the simplest, most easily understandable investment asset—and the safest.
But they have one disadvantage - the interest earned from cash doesnt beat an inflation.
A bond is a debt instrument which is a loan from an investor to a borrower. To earn money the borrower will issue an interest rate to the lender in exchange for using their capital.
A stock is a type of security that signifies proportionate ownership in the issuing corporation. When you buy the stock of a company, you’re effectively buying an ownership share in that company. For example, if a company has 1,000 shares of stock outstanding and one person owns 100 shares, that person would own and have claim to 10% of the company's assets and earnings.
A mutual fund is when more than one investor pools their money together to purchase securities. So they are common assets that can be pooled into active and passive sources as stocks, bonds, and other securities. Mutual funds are valued at the end of the trading day, and all buy and sell transactions are likewise executed after the market closes.
Exchange Traded Funds (ETFs)
ETFs unlike to mutual funds, trade throughout the day, on a stock exchange. They depend on buy-and-sell behavior of stocks. As a consequence, their value can be different during a trading day. Due to the ease of trading and broad coverage, ETFs are popular with investors.
Other types of Investments
They are tangible resources such as gold, silver, crude oil, as well as agricultural products.
Is also a good type of investment. Properties can be residential or commercial. Alternatively, investors can purchase shares in real estate investment trusts (REITs). REITs act like mutual funds wherein a group of investors pool their money together to purchase properties.
Investments in securities like stocks, bonds, derivatives and commodities that are tradeable on the open market and can be bought or sold on short notice. Their value can change on an intraday basis.
Private equity funds
Investments in companies or properties with the intent to operationally manage, grow and sell these assets. Usually these investments take 3-5 years.
How to invest. My advices.
Experienced investments usually distribute their investments into different classes of assets. It is better to start with simple investments such us mutual funds or ETF's exchange-traded funds, then to move on to individual stocks, real estate, and other investments. If you have your question, please write it below, I would be glad to answer your questions or to introduce your project to my team at Astorts Group to be evaluated.
Alessandro Rocco Pietrocola is an entrepreneur and investor based in London and operating mainly in Europe, Asia and Oceania with main focus on UK, Baltic Countries, Russia, China, Hong Kong, Malaysia, Singapore, Middle East and New Zealand as area of interest! At the moment is the CEO of Astorts Group. He is an UK FCA (Financial Conduct Authority) Approved Person and is has great experience as director of regulated companies. He uses to dedicate part of his life to inspire others and help them achieve the most out of their life. Since he was 20, he had successfully founded and managed several companies operating in the field of management consulting, wealth management and fintech. He loves travelling, he is a cigars lover, an amateur golfer and a dapper man.