Real assets can be described as physical assets that have a natural value because of their substance as well as properties.
Some real assets examples would be valuable metals, commodities, real estate, land, equipment, as well as natural resources.
They are proper for incorporation in most diversified portfolios due to their generally low connection with financial assets, such as stocks and bonds.
Assets are classified as either real, financial, or intangible.
All assets can be said to be of financial worth to a company or a person.
If an item has a worth that can be traded for cash, it is viewed as an asset.
Intangible assets can be defined as significant property that is not physical in nature.
Assets like these include patents, copyrights, brand recognition, trademarks, as well as intellectual property.
For a organization, maybe the most significant intangible asset would be its positive brand identity.
Financial assets are a liquid property that ends up deriving value from a contractual right or ownership claim.
Stocks, bonds, mutual funds, bank deposits, investment accounts, as well as cash are all examples of financial assets.
They can have a physical structure, similar to a dollar note or a bond certificate, or be nonphysical—like a money market account or mutual fund.
Conversely, a real asset has a tangible structure, and its worth is derived through its physical characteristics.
It very well may be a natural substance, similar to gold or oil, or a man made one, similar to machinery or buildings.