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Section 5

Stocks vs. Bonds or Fixed-Income

In this section, we’ll compare the returns on various asset classes
over time. We will discuss asset allocation, and how it affects the

growth of your retirement investments. The following is a rough
breakdown of the most common retirement investments:

Asset Classes

Stocks Bonds Cash Equivalents Real Assets

Large Company Government Bonds Money Market Real Estate
Stocks Funds
Corporate Bonds
Small Company Treasury Bills Commodities
Stocks Municipal Bonds
High-Yield Bonds
International Certi cates Gold
Stocks International Bonds of Deposit

Asset allocation is the process of combining asset classes in

a portfolio in order to meet investment goals. In a broad sense,
the three most commonly used asset classes are stocks, bonds,

and cash.

Chapter 3: You Must Have Growth In Your Portfolio