Understanding asset classes
To understand the risk/return relationship and how it relates to your investments, it is essential that you are familiar with each asset class you are investing in.
Asset classes can broadly be divided into two groups:
1. Growth assets - which include shares and property - provide investment returns comprising both capital growth (increase in value of the investment) and income.
2. Defensive assets - which include fixed interest and cash - provide income returns in the form of interest.
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