WHAT ARE ASSET CLASSES AND WHY DO THEY MATTER TO YOU AS AN INVESTOR?
Asset classes are categories (classes) by which we organize individual securities (assets) that share significant factors.
There are broad asset classes for stocks (equities), bonds (fixed income), cash, and real estate.
Within these broad classes, there are narrower asset classes focusing on the drivers of returns:
For stocks, they may be based on:
company size (small vs. large),
relative price (value vs. growth), and