Outline of asset classes

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The following outline is provided as a topical overview of asset classes:

The three main asset classes are stocks, bonds, and cash.

Stocks

A stock share (also known as an equity share) represents ownership in a corporation.

Stock basics

Valuation models

Investment strategies

Vanguard stock funds

Bonds

A bond is a debt investment. Investors loan money to corporations or governments for a set term and interest rate. The initial face value of most bonds is $1,000. After issuance bonds trade on the over-the-counter market where their principal value fluctuates according to changes in interest rates and any changes in the bond's credit quality. Newly issued corporate bonds are syndicated by consortiums of investment banks who initially buy an offering for resale to investors. Government bonds are offered by auction, where investors tender bids for the issue. Bonds are typically used by investors to stabilize the value of a portfolio and/or produce a stream of income.

Bond fundamentals

US government bonds

US corporate bonds

US municipal bonds

International bonds

Bond strategies

Bond funds

Cash

In the investment world, we speak of cash as a collection of short-term investment instruments that are highly liquid and easily converted into ready cash. These investments make up the money markets. The short-term nature of all money market instruments means that they rapidly adjust to changes in short term interest rates. Cash includes familiar bank instruments such as transaction and savings accounts, as well as short term bank certificates of deposit (CDs). Cash also includes a number of marketable liquid securities bought and sold on the money markets. These securities include treasury bills, institutional large bank CDs, commercial paper, bankers acceptances, and repos. Short term municipal securities are held by tax-exempt money funds. Cash investments are held by investors for a number of reasons, primarily as liquid emergency reserves and for funding obligations due in the short to intermediate term.

Money markets