An asset class is a group of financial instruments that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same regulations. Asset classes are used in investment and finance to categorize and diversify investments within a portfolio. Common asset classes include equities (stocks), fixed income (bonds), cash or cash equivalents, real estate, commodities, and alternative investments (such as hedge funds or private equity). Each asset class has distinct risks, returns, and correlation with each other, which influences how investors allocate their resources to achieve desired investment goals. Understanding asset classes helps investors manage risk and optimize returns based on their investment strategy, time horizon, and risk tolerance.
Commercial real estate (CRE) has long been regarded as a fundamental pillar of the global economy, with its fortunes closely tied to the broader business landscape. Despite recent speculation about…