Investment is a great strategy to reach your financial goals and to grow your savings. It can also be accomplished with the help of professional advisors, who can help you balance the need for primary protection and potential for growth against your current financial situation and confidence in risk.
With investments, your and other investors’ savings are pooled together. The fund manager then buys, holds and sells investments on your behalf. Most funds are made up of a mixture of assets, which helps lower the risk of investing. However, some are more specific than others, such as funds that focus on property or commodities. There are also multi-asset funds that can hold a mix of different types of assets such as bonds and shares.
Certain funds are geared towards certain regions or sectors, such as green or emerging markets. A lot of funds have specific investment objectives, for instance, cutting down on unsystematic risks, or aiming for a certain degree of growth. Others have a more general investment focus, such as low-cost investing.
The type of unit trusts OEICs and investment trusts you choose to use will depend on the length of your investment period and your risk tolerance. Younger investors might be more willing to take on a larger level of risk, and thus choose funds with a greater proportion of stocks. However, those who are approaching retirement or have family commitments might prefer to take on less risk and opt for funds that have more bonds.
