Investing – What You Need to Know
It is a great way to grow your money and reach your long-term financial goals. It is also possible to accomplish this with the assistance of an experienced adviser, who can assist you in balancing your financial situation and comfort level with risk against the need to increase your potential growth and the protection of your principal.
Investment funds pool your savings with those of other investors. A fund manager will purchase, hold and even sell investments on your behalf. The majority of funds are a mixture of assets which lowers the risk of investment. However, some funds are more focused than others, such as funds that focus on commodities or property. There are also multi-asset fund that can hold a mix of various asset types, such as bonds and shares.
Some funds are geared toward a specific region or sector, such as emerging markets or green investments. Many also have a range of investment goals that are specific, for instance, targeting specific levels of growth or reducing risk that is not systemically controlled. Others have a more general objective, for instance, low-cost investing.
The type of unit trusts, OEICs and investment trusts you choose to use will depend on your investment timeframe and your risk tolerance. For example, younger investors are typically more comfortable taking greater risk and are more likely to choose funds that have a larger proportion of equities. On the other hand, those nearing retirement or who have family commitments might want to take on less risk and select an investment with more bonds.