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Hey,

After my last few newsletters, my inbox blew up with the same question:

“What’s actually out there to invest in… and what kind of returns can you expect?”

It’s a good one - because most people stick to what they think they know (usually just stocks)… and leave huge opportunities untouched.

So today, we’re going to strip it down - asset class by asset class:

1. Public Equities (Stocks)

Definition: Ownership shares in a company - you profit when it grows or pays dividends.

Access via exchange: Stock exchanges via individual shares, funds (ETFs, mutual funds), and derivatives.

Role: Always part of a long-term allocation - passive core through ETFs/mutual funds, plus concentrated satellite positions via individual stocks or thematic funds.

2. Bonds

Definition: Loans you give to governments or companies - paid back with interest.

Access via broker-dealer market or exchange: individual government/corporate bonds, bond funds (ETFs, mutual funds), structured notes.

Role: Often part of a long-term portfolio for protection and income.

3. Currencies (FX)

Definition: Buying one currency while selling another - profiting from rate changes.

Access via broker-dealer market: spot trades, derivatives (forwards, futures, options, CFDs).

Role: Primarily used for hedging or tactical macro bets.

4. Commodities

Definition: Physical goods like gold, oil, wheat - value driven by global supply and demand.

Access: Commodity ETFs, derivatives (futures, options on futures, CFDs), commodity-linked structured products.

Role: Highly cyclical - usually not part of a long-term allocation but useful for tactical bets.

5. Derivatives

Definition: Contracts whose value depends on another asset (e.g., stocks, bonds, commodities).

Types: Options, futures, forwards, swaps - via brokerages or OTC markets.

Role: Hedging, leverage, and income strategies - returns vary by approach.

6. Structured Products

Definition: Pre-packaged investments combining derivatives and underlying assets to create custom payoff profiles.

Access: Banks, investment firms, private placement platforms.

Role: Capital protection, yield enhancement, or thematic bets - often with high fees.

7. Alternatives

Private Equity: Buying ownership in private companies before IPO or sale.

Access: Private funds, direct deals. Historically solid returns, but illiquid.

Venture Capital: Early-stage investing in startups with high growth potential.

Access: VC funds, angel networks, direct deals. High upside, high failure rate.

Private Credit: Lending directly to businesses without public markets.

Access: Private credit funds, direct lending. Solid yields but requires sophistication.

Hedge Funds: Active funds using flexible strategies to generate returns in all markets.

Access: Qualified investor programs. Returns depend entirely on manager skill; high fees.

Infrastructure: Assets like toll roads, ports, and utilities.

Access: Infrastructure funds. Stable, income-focused returns; illiquid.

Real Estate: Physical property or property-linked investments.

Access: Direct purchase, REITs, ETFs, property mutual funds, private funds.

8. Cash & Cash Equivalents

Definition: Highly liquid, low-risk holdings.

Access: Bank accounts, money market funds, short-term T-bills.

Role: Low yield, often below inflation; mainly for parking cash, not growth.

To sum it up:

• Diversified Equities: Core long-term growth engine.
  

• High-Quality Bonds: Income and stability.
  

• Currencies: Hedge in the long term, tactical macro bets in the short term.
  

• Commodities: Not a core long-term holding, used more for tactical allocations.
  

• Derivatives: Hedge and speculate tactically.
  

• Alternatives: Potential for premium returns - but less liquid and more exclusive.
  

This graph from BlackRock shows expected return and volatility of these instruments:

There are also more advanced asset classes and niche products outside traditional allocations - cryptocurrencies, collectibles, life bonds, and more.

We’ll cover everything in depth along with other interesting topics in my Investment MBA.

Join the waitlist for early access and exclusive bonuses:

https://wildcapital.co/pages/investment-mba-waitlist

To smarter asset allocation,
Igor