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Bonds and cash are both fundamental asset classes that are frequently grouped together in investment portfolios to balance risk, growth, and liquidity, as evidenced by [1], [2], and [3]. They are commonly contrasted with stocks or alternative investments to define the spectrum of traditional financial assets, as seen in [4], [5], and [6].

Facts (21)

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The Relationship Between Risk and Return in Different Asset Classes bi-sam.com Bi-SAM 9 facts

claimRising interest rates have a positive impact on cash (higher yields), a negative impact on bonds (declining prices), a mixed or negative impact on stocks (higher discount rates), a negative impact on real estate (higher financing costs), and an often negative impact on gold (higher opportunity cost).

measurementA Moderate portfolio typically consists of 40-60% stocks, 30-50% bonds, 5-15% cash, and 0-15% alternatives, resulting in a medium risk level and an expected return of 6-8%.

claimFalling interest rates have a negative impact on cash (lower yields), a positive impact on bonds (increasing prices), a mixed or positive impact on stocks (lower discount rates), a positive impact on real estate (lower financing costs), and an often positive impact on gold (lower opportunity cost).

claimAlternative investments are assets outside of traditional stocks, bonds, and cash, often characterized by unique risk-return profiles and lower correlations with traditional markets.

measurementA Balanced portfolio typically consists of 50-70% stocks, 20-40% bonds, 0-10% cash, and 0-20% alternatives, resulting in a medium-high risk level and an expected return of 7-9%.

measurementA Growth portfolio typically consists of 70-85% stocks, 10-25% bonds, 0-5% cash, and 0-15% alternatives, resulting in a high risk level and an expected return of 8-10%.

measurementA Conservative portfolio typically consists of 20-30% stocks, 50-60% bonds, 10-20% cash, and 0-10% alternatives, resulting in a low risk level and an expected return of 4-6%.

claimDuring economic downturns, high-quality bonds and cash often outperform riskier assets.

measurementAn Aggressive portfolio typically consists of 85-100% stocks, 0-10% bonds, 0-5% cash, and 0-20% alternatives, resulting in a very high risk level and an expected return of 9-12%.

Retirement savings by age: What to do with your portfolio in 2026 troweprice.com T. Rowe Price 3 facts

claimRetirees should maintain exposure to stocks to support a retirement that can last up to three decades or more, while also increasing exposure to bonds and cash to mitigate short-term risks associated with accessing assets for income.

procedureFor individuals preparing to retire, T. Rowe Price recommends a three-part strategy: reviewing Social Security options, planning withdrawals from different account types for tax efficiency, and maintaining stock exposure while adding bonds and cash for stability.

claimIn T. Rowe Price's asset allocation models, a longer investment time frame corresponds to a higher allocation to stocks and higher volatility, compared to allocations in bonds or cash.

Managing Your Retirement Portfolio | FINRA.org finra.org FINRA 2 facts

claimAsset allocation is the process of creating a portfolio with a specific mix of investments to achieve a desired return while managing risk by spreading investment principal across different categories like stocks, bonds, and cash.

claimAsset allocation helps smooth out the volatility of an overall portfolio because different investment categories, such as stocks, bonds, or cash, perform differently under varying economic conditions.

Asset Allocation Planning - T. Rowe Price troweprice.com T. Rowe Price 2 facts

claimAs an investor's timeline to ride out market volatility shortens, they may include more bonds and cash in their portfolio.

claimStocks, bonds, and cash are the primary asset classes that play distinct roles in an investment portfolio.

Retirement Portfolio Assets: Allocation by Age - Charles Schwab schwab.com Charles Schwab 2 facts

claimRetirees may tend to have more assets in cash, bonds, and fixed income investments to reduce risk and generate income for daily expenses.

claimInvestors often split portfolios between stocks, bonds, and cash to balance growth and risk against income and safety.

Understanding the Relationship Between Risk and Return for ... dunbrook.ca Dunbrook 1 fact

procedureInvestors should align their portfolio mix of stocks, bonds, and cash with their specific financial goals and risk tolerance.

Six financial literacy principles - RBC Wealth Management rbcwealthmanagement.com RBC Wealth Management 1 fact

claimInvestment vehicles, such as mutual funds or ETFs, are financial products that enable investors to buy and sell underlying asset classes like cash, bonds, or stocks.

Alternative investments: How to diversify portfolios and ... - FlexFunds flexfunds.com FlexFunds 1 fact

claimAlternative investments are defined as assets that fall outside the spectrum of traditional vehicles such as bonds, equities, or cash.