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Equity based
investments
[eg., shares]

Financial assets
investments [eg.,
shares and bonds] Fixed income
Investments
FOR ONLINE READING ONLY
based investment
[eg., bond]

Real assets/trading
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investments
[eg., land,building]
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Figure 4.1: Major categories of investments

The advantages and disadvantages Real assets investment also offers secure
of each category of investments and steady income e.g., receiving monthly

Investments in real and financial assets income from tenants in the form of rent.
do share one important similarity, which Activity 4.1
is providing an opportunity or potential Use different sources of information,
for generating cash/revenue. However, including libraries and the internet to
there are several differences based on the identify five possible reasons for an
advantages and disadvantages of each type individual to invest in real assets. Choose
of investment. For example, real assets are three real asset investment options
that a family can establish to generate
typically less liquid than financial assets income for paying the school fees of two
since they are usually more cumbersome to children who are about to start primary
exchange and their markets are not efficient school. Also, identify three real asset
or populated. The value of real assets also investment options that an employee
is much more dependent on factors such as of public institutions (including school
location, function, and operation, as well as teachers, police officers, medical doctors,
and nurses) can invest in as part of their
exchange costs. On the contrary, financial alternative plan.
assets are typically fungible, thereby making
their location independent. The main Definition, nature and
advantage of real assets includes its ability characteristics of financial
to offer more protection against inflation assets investment
– the value of such assets and the income The following are the different sections
they generate, tend to grow with inflation. providing the definition, nature and
Financial assets, on the contrary, may or characteristics of investment in financial
may not be protected against inflation risk. assets:

Student’s Book Form Five
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