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An asset is a
good that can be assigned a value. Goods can be
tangible or intangible.
There are variations in the definition of assets depending on the context in which the term is used:
Assets in Business Administration
An item with a tangible monetary value that can be reflected in the balance sheet, e.g. a machine, an IT system, a building.
Assets in Economics
Refers to the total assets of a state.
Various asset classes must be distinguished when it comes to financial assets. The following are some of the most important:
There is sometimes considerable variation between asset classes in terms of characteristics such as security, liquidity, and profitability. When deciding on an investment, investors should take these into account.
In the broadest sense, personal items, such as vintage cars, furniture, and jewelry, can also be considered financial assets. These items can also be converted into cash. Whether returns are possible with these objects is highly dependent upon demand or how much the buyer is willing to pay.
Real assets are tangible assets that can be touched or viewed in person. Among the real assets are, for example:
These assets are considered to have stable value and generate long-term cash flow.
What are the best assets to purchase? What are the best ways to distribute capital among the various assets? Wealth management deals with these questions. In theory, distributing capital among several assets is a good strategy for distributing risk.
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