Understanding Asset Classes

• Equities (Stocks): Represent ownership in a company. Historically offer higher potential returns over the long term, but come with higher volatility (risk). Suitable for long-term growth objectives.
• Fixed Income (Bonds): Represent debt obligations (loaning money to an entity). Generally considered lower risk than stocks, providing more stable returns and capital preservation. Often used to balance portfolio risk.
• Cash & Equivalents: Highly liquid, very low-risk assets (e.g., savings accounts, money market funds, short-term Treasury bills). Primarily for short-term needs, emergency funds, or to reduce overall portfolio risk. Offer minimal growth potential.