Asset Classes

Typically, there are 4 main asset classes you can invest in.

We will help you to get the right blend that reflects your needs and appetite for risk. These asset classes are:

Equity

Property

Bonds

Equities offer part-ownership of a company and thus a claim on its future earnings.
Historically they have delivered more than 5 % above inflation in the UK.
Research shows that equities tend to perform better than cash, bonds and property over the longer term. However in order to potentially seek higher gains you increase your exposure to capital loss especially in the short-term. The risk reward trade-off is:
Higher than cash, bonds and property.

Property refers to commercial property. It doesn’t refer to your house. Sticking all your money in a ‘buy-to-let’ concentrates rather than diversifies your holdings and is taking a big punt on the everlasting strength of the UK property market.
Property is likely to keep pace with inflation and are invested over the medium to long term. However, it is illiquid and historically lags equities. The risk reward trade-off is: Higher than cash and bond but lower than equities.

We’re all familiar with money. The simplicity and familiarity of cash is one of its biggest advantages, but excessive devotion to it can be the undoing of the cautious investor. Capital is protected and liquid. Mainly used for emergency funds or short term expenditure.
However inflation erodes the buying power over time. Cash can be invested over the short to medium term. Historically cash offers the lowest returns. The risk and reward trade-off is: Low

Bonds are I.O.U.s issued by an entity such as a company or government. In return you receive a guaranteed stream of interest over the loan period, plus you’ll get your original stake back after an agreed number of years.
Historically they provide a better return than cash. They are still vulnerable to inflation and changes to interest rates. Bonds can be invested over the medium to long term.
The returns on bonds lags equities. The Risk and reward trade-of is: Lower than equities and higher than cash.

ASSET CLASS PERFORMANCE OVER 20 YEARS