Investing 101 (Part 4)

We now have a good understanding on the different asset classes. As a reminder they are:

1. Cash
2. Bonds
3. Equities
4. Property
5. Commodities
6. Collectibles

As a financial adviser unfortunately I can not tell you which asset class to put all your money in. Obviously the best way to make money would be to put it all in the one asset class that goes up the most. Unless you have a crystal ball it would be almost impossible to predict what asset class that is. (If you do have a crystal ball, may I borrow it for a couple of days please?)

So what I can tell you that in the short term I do not know what asset class will go up the most. But what I can say is that over the medium to long term equities should always outperform bonds and bonds should always outperform cash. If this doesn't happen then the whole capitalist system is on the way out.

My job as a financial adviser is to find out about your current situation and then to blend your assets to meet your short, medium and long term financial goals.