What is investable assets?

Investable assets, also known as investment assets or investment-worthy assets, refer to financial assets that have the potential to generate a return or increase in value over time. These assets are typically held by individuals, organizations, or institutional investors with the intention of generating income or growing their wealth.

Some common examples of investable assets include:

1. Stocks: Shares of public companies that can be bought and sold on stock exchanges. Investors can earn returns through capital gains (when the stock price increases) and dividends (a portion of the company's profits distributed to shareholders).

2. Bonds: Debt instruments issued by governments or corporations to raise capital. Investors lend money by purchasing bonds and receive periodic interest payments until the principal amount is repaid at maturity.

3. Mutual funds: Pooled investment funds that collect money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. Mutual funds are managed by professional fund managers.

4. Exchange-traded funds (ETFs): Similar to mutual funds, ETFs are investment funds that are traded on stock exchanges. They offer the flexibility of trading shares throughout the day, unlike mutual funds that are valued and traded at the end of the trading day.

5. Real estate: Properties such as residential, commercial, or industrial buildings that can be bought and rented out for income generation. Real estate can also appreciate in value over time.

6. Commodities: Raw materials or primary agricultural products, such as gold, silver, oil, natural gas, wheat, or coffee. Investors can buy and sell commodity contracts, either physically or through derivatives, to profit from fluctuations in prices.

7. Certificates of deposit (CDs): Time deposits offered by banks, where investors deposit a certain amount for a fixed term at a fixed interest rate. CDs provide a guaranteed return upon maturity.

8. Cash equivalents: Highly liquid and low-risk assets that can be easily converted to cash, such as savings accounts, money market accounts, or Treasury bills. These provide stability in a portfolio but generally offer lower returns.

Investable assets are essential for diversifying portfolios, managing risk, and growing wealth. The allocation and selection of investable assets depend on an individual's risk tolerance, investment objectives, time horizon, and market conditions. It is crucial to conduct proper research, seek professional advice, and consider one's financial goals before investing in any asset class.