Investments can be a great way to grow your funds and reach long-term financial goals. It can also be done in conjunction with the help of professional advisors to help you ensure that you have the right amount of primary protection and growth potential against your financial circumstances and comfort with risk.
Investment funds pool your savings and the savings of other investors. A fund manager will then buy, hold and sell investments on your behalf. Most funds comprise an assortment of assets that lowers the risk of investment. Some funds are more specialised like those that concentrate on property or commodities. There are also multi-asset fund that could contain a mix of different asset types, including shares and bonds.
Some funds are geared towards certain regions or sectors for instance, emerging markets or green investment. Many also have a range of investment goals such as focusing on specific growth levels or reducing risks that are not systemic. Others have a more general investment focus, such as low-cost investing.
The kind 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 inclined to take on a larger degree of risk, and therefore, pick funds that contain a higher proportion of stocks. Alternatively, those approaching retirement or with family obligations may prefer to take less risk and choose funds that have more bonds.