Growth and Defensive Assets

Growth and Defensive Assets Growth assets As the name implies, Growth Assets are investments that are geared for higher returns. Equities and Property are generally accepted as being growth assets due to their higher average return over the long term even though the value of these assets can fluctuate vastly over shorter periods. The graph below shows that despite short periods of fear and loss, over the long term the equity market has delivered real growth. Defensive Assets Cash and bonds are assets that have shown to have a less volatile asset value over the short term but deliver lower long term returns than Growth Assets. These are therefore considered Defensive Assets. The graph below compares the returns of growth assets (Equities) versus inflation (as measured by CPI) and defensive assets (Cash and Bonds), clearly illustrating the difference in the... Read More