Every asset class is divided and distributed as per its advantages and disadvantages and the people looking to invest need to consider them all in order to come across one perfect class for them which is going to give them the return which is as per their requirement. But all these asset classes have their own form and can help to create a portfolio which can suit into your needs. Here is an overview of the advantages and disadvantages of the different asset class.

Equity

Equities are known and most commonly used for greater returns as it has a history of higher returns in the long run. The class is applicable where you are looking to invest for a longer period. This class also imposes a greater risk on your capital, the one you invested. As there are varied prices, the return might not be what you invested, and it can be a loss.

Fixed income/Bonds

This could be considered to be a better option as it does not impose as much risk on your investment. This class is also known as Bonds. The person who holds the bonds receives at a fixed rate, and so the investment is saved. Even when the rates change, it is less likely to cause any loss as the prices of the bonds are not that volatile.

Real Estate

Real Estate or property comes under physical asset class. It’s the only asset which gives mental peace and satisfaction of possession. Real estate can also be considered as protection against inflation.

Cash

Cash or cash equivalent investments are more popular for its liquidity. Cash equivalent investments includes money market funds or liquid funds. The main reason for keeping money in these asset class is to use the money for emergencies or urgent needs.

Others

Other asset classes include commodities, derivatives & alternative investments like hedge funds, possessing antiques or art work, bitcoins etc.

The basic understanding of above asset classes and investing in any or by combining themas per your goals, risk, time horizon, liquidity needs can result in greater profits. Also, the risk can be minimized by using a diverse combination of asset classes for investment. limitation to one class by comparing them, can limit the output to or sometimes, can result in a loss too.

Each asset class has its own risk & returns features and performs differently in market up/down cycle. Therefore, rather than comparing, better to invest in several asset classes by ensuring proper diversification as per your financial situation and requirements.