The investment process can be a fantastic opportunity to grow your money and reach your long-term financial goals. It’s also something that can be done with the assistance of professional advisers, helping to make sure you are balancing the need for primary protection and growth potential with your financial circumstances and comfort with risk.
Investment funds pool your savings with those of other investors. A fund manager can buy, hold and sell investments on your behalf. The majority of funds are comprised from a mix of assets, which can help lower the risk of investing. However, some are more specific than others, for example funds that are focused on commodities or property. Multi-asset fund can contain an array of different asset classes, such as bonds and shares.
Certain funds are geared toward specific regions or sectors like emerging markets or green investment. Many funds have investment objectives, for instance, the reduction of unsystematic risk or aiming for a certain degree of growth. Others have a more general objective, for instance, low-cost investing.
The type of unit trusts, OEICs and investment trusts you select will depend on the timeframe you invest in and your risk tolerance. For example, younger investors are more likely to accept a higher level of risk and are personal finance forum likely to select funds with greater proportions of equity. For those who are nearing retirement or who have family commitments might prefer to take a lower level of risk and opt for funds that have more bonds.