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Asset classes
Beyond stocks — bonds, ETFs, REITs, commodities and futures, forex and crypto, and how each one behaves.
Overview
- Asset classes explained: stocks, bonds, cash, real assets and more What an asset class is, how stocks, bonds, cash, real estate, commodities, currencies, crypto and derivatives differ, and what 19 years of ETF prices show.
- Stocks as an asset class: long-run returns, drawdowns and recovery How stocks behave as a portfolio holding: 33 years of SPY returns over 1-, 5-, 10- and 20-year windows, how deep the falls went and how long recoveries took.
- Correlation between asset classes: how it works and why it shifts How to calculate a correlation by hand, what 12 years of monthly returns show across eight asset classes, and why the stock-bond correlation flipped in 2022.
Fixed income and cash
- Bonds and fixed income: how bonds work, pay and lose value What a bond is, how its cash flows and price are calculated, the main types of fixed income, the five risks to know, and what the 2020–2023 rate shock did to bond ETFs.
- Bond duration and convexity: measuring interest-rate risk How Macaulay and modified duration are calculated, a worked 10-year bond example, when convexity matters, and what duration did to Treasury ETFs in 2020–2024.
- Credit ratings and credit spreads: how bond risk is priced How the AAA-to-D rating scales work, who the SEC-registered rating agencies are, and how to read the yield spread between corporate bonds and Treasuries.
- Corporate and high-yield bonds: how company debt behaves How corporate bonds work, what separates investment grade from high yield, and how LQD, HYG and IEF prices behaved in 2008, 2020 and the 2022 rate shock.
- Municipal bonds: GO vs revenue bonds and tax-free yield math How municipal bonds work, general obligation vs revenue bonds, the federal and state tax exemptions, taxable-equivalent yield by bracket, and how MUB has behaved.
- Bond ETFs vs individual bonds: maturity, risk and cost compared Why a bond fund never matures, why holding a bond to maturity doesn’t erase a rate loss, and how costs, diversification and ladders compare, with worked numbers.
- Money market funds and cash: T-bills, savings and real returns How money market funds work under SEC Rule 2a-7, government vs prime funds, how they differ from FDIC-insured savings and T-bills, and what cash earned after inflation.
Funds and REITs
- How ETFs work: creation, redemption, NAV and the arbitrage band Inside the ETF machine: authorized participants, creation units, baskets, NAV versus iNAV, the cost band that limits premiums, in-kind tax efficiency and SEC Rule 6c-11.
- Leveraged and inverse ETFs: daily reset math and volatility drag How 2×, 3× and inverse ETFs reset every day, why their long-run returns drift from the multiple, the volatility-drag formula, and what QQQ, TQQQ and SQQQ did since 2021.
- REITs explained: how real estate investment trusts work What a REIT is, the IRS tests and 90% payout rule behind it, equity vs mortgage REITs, FFO, why REITs react to interest rates, and how VNQ compared with the S&P 500.
- International stocks and ADRs: how US investors own foreign shares Developed vs emerging markets, how currency moves change your return, how ADRs work (levels, ratios, fees), and the TSM ADR’s premium to its Taipei shares.
Futures and commodities
- Derivatives explained: forwards, futures, options and swaps What a derivative is, how the four basic contracts differ, notional value, hedging versus speculation, counterparty risk and clearing, with worked dollar examples.
- Futures contracts explained: specs, clearing, expiry and settlement How a futures contract works: contract size and tick value, the clearinghouse, daily mark-to-market, expiry, and physical versus cash settlement, with CME examples.
- Futures margin and leverage: initial, maintenance and margin calls How futures margin works as a performance bond: initial and maintenance levels, daily variation margin, margin calls and leverage, worked through one crude contract.
- Contango, backwardation and roll yield: why USO lags oil What contango and backwardation are, how rolling futures creates roll yield, and why the USO oil fund ended 2006–2026 far below spot crude, with real data.
- Commodities explained: energy, metals, crops and how to own them What commodities are, how energy, metals and agricultural markets differ, the ways to get exposure, and what 20 years of DBC prices show against stocks and the CPI.
- Gold and precious metals: how gold is priced and what drives it How gold trades through futures, bullion funds and coins, its 26-year price record, and how its link to real interest rates held for 17 years and then broke.
Forex
- The forex market explained: how currency trading works How the $9.6 trillion-a-day foreign exchange market is organized: dealers, spot, swaps and futures, the major pairs, who trades and what EUR/USD history shows.
- Currency pairs and pips: quotes, lots, pip value and leverage How to read a currency quote, what a pip and a lot are, how to calculate pip value in dollars for any pair, and what US retail forex leverage limits mean in practice.
- Forex trading sessions: Sydney, Tokyo, London and New York hours When the 24-hour forex market is open, how the Sydney, Tokyo, London and New York sessions overlap, how daylight saving shifts them and why liquidity changes by hour.
Crypto
- What is bitcoin? How it works, its supply cap and its price history How bitcoin’s network, proof of work and 21 million coin schedule work, with halving arithmetic and twelve years of price and drawdown data.
- Ethereum and smart contracts: how ether, gas and staking work What Ethereum adds to bitcoin’s idea: smart contracts, gas fees with a worked example, proof of stake since the 2022 Merge, and five years of ETH vs BTC data.
- Stablecoins: how dollar tokens hold a $1 peg and how they fail How reserve-backed and algorithmic stablecoins keep a $1 price, the redemption arbitrage in numbers, the TerraUSD collapse and the 2025 GENIUS Act rules.
- Crypto wallets and custody: keys, seed phrases, hot and cold storage Who really holds your crypto: private keys, seed phrases, hot and cold wallets, exchange custody, what the FTX failure showed, and why SIPC doesn’t cover coins.
- How crypto markets differ from stocks: hours, venues and volatility Why crypto trades 24/7 on fragmented venues with no market-wide halts, how its volatility compares with SPY in a year of daily data, and what spot ETFs changed.
Educational content, not investment advice. Finabase Learn explains how markets and tools work. It does not recommend any security or strategy, and examples are for illustration only. Investing involves risk, including the loss of principal. Rules and figures are for the United States unless stated and can change — check the cited source before you act.