Asset classes and asset allocation | What are they?

Asset Allocation
Asset Allocation

Today we dedicate a few lines to the explanation of terms that we use on our page often taking for granted that readers can understand their meaning. We start from the term asset which is actually in English but has a financial sense only when used in the plural and means property, business assets, heritage. With that said, it is clear that asset class means investment category or class of financial investment or investment activity. The most classic examples of asset classes are:

– Cash and financial instruments similar to it such as deposit accounts, checking accounts, Treasury bills and others.
– Obligations;
– Actions;
– Buildings;
– Currencies;
– Commodities or natural resources such as oil, gas, coal;
– Precious metals;
– Luxury goods, works of art, fine wines, cars, jewelry etc.

Asset Allocation

Asset Allocation

Asset allocation is the allocation of investments or the distribution of the available funds among the various asset classes which all together make up the portfolio of the investor. Usually, there are three types of asset allocations:

– Strategic calibrated on a medium to long time horizon;
– Tactic with short time horizon and time to take advantage of market trends of the moment;
– Dynamic particularly sensitive and adaptable to market changes.