Five assets to have in your portfolio

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asset classes and portfolio building for millenials on SolonEquities/Shares

Equity/shares denote ownership, an investor who owns a share in a company is a shareholder of the corporation. A share is an inseparable unit of capital, affirming the ownership relationship between the corporation and the shareholder

For example, if Company XYZ has £200,000 shares and you buy 20,000, you will own 10% of Company XYZ. As a shareholder of the XYZ, you have ownership rights to company’s profits, these profits are paid to investors in form of dividend and this amount is not the same for every company

Fixed-Income/Bonds

A bond refers to defined income or loan issued to an organization by an investor which is bound by an agreement. Government and companies utilize bonds for the purpose of financing projects and operations

Whenever an investor buys a bond from an institution, he/she is essentially loaning them money-hence can be classified as a debt. In repayment for the loan, the institution undertakes to pay interest on the loan offered to them in form of intermittent outflows. Interest payments are made to the bondholders for the whole period in which the bond agreement still exists, and the principal is paid at the end of the maturity period. I.e. if an investor makes a purchase of £1,000 with a 5-year bond with an interest rate of 2%, the investor will receive biannual payments of $10

Cash 

Cash represents physical monetary funds in the form of coins or notes distinctive from credit or cheque. Under this type of asset class, Cash is one of the most key rudiments in a business transaction. Cash can be invested or borrowed for short-term purposes i.e. investments or project expenses

Real Estate 

Real estate is a common tangible asset owned by people, this kind of asset is physical and tangible assets as disparate to other asset classes. Real estate is an investment type which acts as a defense against inflation and yields high investment returns on behalf of the investor or corporation but on a flip side, real estate can be enlisted as an expense because it is subject to depreciation over time

Commodities

A commodity is a tangible substance of value that can be exchanged for cash or converted into a more refined product. Examples include crude oil, mineral stones, agricultural products, etc. They are usually traded on an exchange basis, a lot of investments are driven by commodities around the world powering the global business of demand and supply. Commodities are traded globally by corporations, government, individual investors, private firms, and this type of asset class is known to withstand periods of inflation

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