Resources - Investing
ASSET CLASSES BY INVESTOR PROFILE
Learn the different investing styles and choose what's best for you!
Asset Classes by Investor Profile
| Real Estate | Securities | Business Ownership | Commodities | |
|---|---|---|---|---|
| Average Return | 21% | 7% | 10% | 12% |
| Volatility | Minimal (1-3%) | Significant (8-10%) | Moderate (3-5%) | Moderate (3-5%) |
| Investor Profile | Seeking lower volatility than stocks and higher return than stock dividends | Conservative investors seeking safe returns with minimal labor/effort involved in other classes like Real Estate or Business | Problem Solvers with excellent organization skills. Understand the importance of processes and how good processes lead to passive income | Heavy researchers. They believe that because a SME in a particular thing is the way to wealth |
| Advantages | Steady returns Investment backed by physical ownership | Both fixed-income and value growth investments possible | Control of the asset and an ability to increase or decrease revenues and profit | Not a lot of competition allows for investors to dictate price and enjoy a steady demand |
| Disadvantages | Time and capital invensive | Volatility in equities, low returns in fixed income | Requires an established business which requires a lot of time and energy | Price fluctuations, government regulations, low ability to pivot in times of significant change |
| Entry Barriers | High (high initial cash investment required for SFR rental properties) | Low (investments into securities can be completed with low capital and financial knowledge) | Medium (business knowledge, capital and investments are needed to build a successful company – Would be rated high if these things were needed immediately) | Moderate (It is very time intensive and complex to start investing compared to securities) |