Investing is a great way to reach your financial goals and to grow your money. It’s also a strategy that can be done with the assistance of professional advisors to help you keep in mind the need for primary protection and potential growth against your financial situation and confidence in risk.
With the investment funds, your and other investors’ savings are pooled together. A fund manager buys securities, holds them, and sells them on your behalf. The majority of funds comprise a mixture of assets which reduces risk of investment. Certain funds are more focused in nature, for instance, those that concentrate on commodities or property. There are also multi-asset fund that can hold a mix of different types of assets including shares and bonds.
Certain funds are targeted towards specific regions or segments, such as emerging markets or green investments. Many also have a range of investment goals, for instance, targeting specific growth rates or reducing unsystematic risk. Others have a more general investment goal, like low-cost investing.
The type of unit trusts, OEICs and investment trusts you select will depend on both the length of more your investment period and your risk tolerance. Younger investors may be more willing to accept a higher degree of risk, and consequently, choose funds with a greater proportion of stocks. On the other hand, those nearing retirement or have family commitments may prefer to take less risk and pick an investment with more bonds.