Investors often allocate funds at the level of asset categories.

Investors often make decisions at the level of asset categories.

They are convinced that increasingly people will view art as an asset category, and not just something to enjoy.

Let's take a closer look at the characteristics of the three major asset categories.

The chances of losing money on an investment in this asset category are generally extremely low.

Stocks, bonds, and cash are the most common asset categories.

Historically, the returns of the three major asset categories have not moved up and down at the same time.

But neither strategy attempts to reduce risk by holding different types of asset categories.

The key is to identify investments in segments of each asset category that may perform differently under different market conditions.

Jumping to a different asset category on the day of a plunge means that "they're locking in a loss," she said.