Types of investment
The different types of investments are often referred to as ‘asset classes’ – some common examples include company shares (or ‘equities’), bonds, property and cash.
The performance of different asset classes will naturally vary over time. As they all have their own unique characteristics, wider market conditions and world events will affect them differently. That’s why it’s important to spread your money over a range of investments – it enables you to reduce the risk of your pension savings falling in value if one asset class is out of favour. Investors usually call this strategy ‘diversification’.
Watch our short video about asset classes.
Watch time: 3 mins 2 seconds