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Growth Assets

by MoneyPuzzle Admin   ·  April 17, 2019  

Growth Assets

by MoneyPuzzle Admin   ·  April 17, 2019  

Growth assets as against fixed return assets are those which grow your capital or principle investment. The most common forms of growth assets are equity stocks and property. Investing in equity stocks means you buy a portion of the underlying company. As profits of the company grow, the value of your stock grows and this leads to a capital growth for your investment. The same happens in property. As the value of your property grows, your capital investment grows in value. This is different from earning a defined fixed return on your fixed deposit for say a year or three and then getting your capital back. In case of growth assets, the longer the you remain invested the higher your return is likely to be. The caveat here once again is about quality. If you invest in a poor quality asset, your return will be a loss of capital. Hence, growth assets come with risk and require closer monitoring than fixed return assets.