Asset Classes

Cathy Smart and the investment analysts at 401k Forum help you get down to the ..... with this article about the different asset classes.

Asset classes are the categories that your different investments ..... into - such as cash, bonds, large-cap stocks, small-cap stocks, and international stocks.

Studies have shown that the key to successful investing is to ..... your wealth among different asset classes.

Market capitalization (market cap) is a measure of the size and value of a company; to determine this, you simply multiply the number of the company's ..... shares of stock by the market price of one share.

Market capitalization is important because history has shown us that the stocks of companies with different market caps ..... differently in terms of return and risk.

Cap-size shift: mid-cap stocks may have once been defined as large cap, but fell out of ..... with investors.

Mid-cap stock performance usually falls somewhere in between the returns of their large- and small-cap ......

However, mid- and small-cap stock returns tend to be more ..... than the returns of large-cap stocks.

If a smaller company loses a few key executives, or if the economy takes a ..... for the worse, it only takes a few nervous investors to cause the stock to drop drastically.

..... can reduce your risk and help protect your investment: if one asset class in your portfolio is performing poorly, there's a chance that another asset class within your portfolio will be performing well.