Asset Classes By Risk Category

In today's video we will be talking about asset classes by risk category, we will start from the lowest risk and go to the highest risk

. The first and lowest risk as a class is cash and cash equivalents.

Investors typically hold cash as a way of maintaining liquidity. Cash equivalents include money in your checking account, it also includes cash equivalents that are considered very safe like treasury bills and commercial papers.

Cash equivalents are considered low yield compared to other investments, but it’s great to have in case a good deal becomes available.

There’s little risk when it comes to holding cash outside of losing purchasing power due to inflation.

Watch the rest of the video for more information about the other classes and their risk categories.