What is an "asset class"?
An asset class represents a group of securities that have similar price movements. What I mean by these securities, and a security can be a stock, a bond, or a real estate portfolio, but these individual securities are going to react to market conditions in the same way. So their prices are going to go up and down together, and so you can group them all together because they're going to have the same kind of risk reward characteristics, and that's going to create an asset class. Classic examples of asset classes have been stocks, bonds, cash, and real estate. There's more advanced definitions now such as a Large-Cap Growth Stock or a high-risk bond, but these are more specific asset classes.