Investments can be a great opportunity to grow your money and meet your long-term financial goals. It is also possible to accomplish this with the assistance of a professional advisor, who can assist you in balancing your financial situation and level of comfort with risk against the need for some growth potential and the protection of your principal.
Investment funds pool your savings with the savings of other investors. The fund manager will buy, hold and then sell investments on your behalf. Most funds are made up of a variety of assets, which helps to reduce risk associated with investing. However, some funds are more specialized than others, like funds that focus on property or commodities. Multi-asset funds may hold various types of assets, like shares and bonds.
Certain funds are geared towards certain regions or sectors like emerging markets or green investments. Many funds have distinct objectives for investment, such as the reduction of unsystematic risk or aiming for a certain level of growth. Others have a common investment goal that include 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 approach to risk. For instance, younger investors are generally more comfortable taking risks that are higher and may be more inclined to select funds with greater straight from the source proportions of equity. However, those who are approaching retirement or with family commitments might want to take on less risk and pick an investment with more bonds.