Investing can provide an excellent way to grow your money and meet your long-term financial goals. It is also possible to achieve this with the help of a professional advisor who can assist you in balancing your financial situation and level of comfort with risk versus the need for some growth potential and the protection of your principal.
Investment funds pool your savings with those of other investors. A fund manager then purchases the investments, holds them and then sells them on your behalf. The majority of funds comprise an assortment of assets that reduces risk of investment. However, some funds are more specialized than others, like funds that focus on commodities or property. There are also multi-asset funds which can hold a mix of different types of assets, such as bonds and shares.
Certain funds are targeted towards specific regions or sectors for instance, emerging markets or green investment. Many also have a range of specific investment objectives for instance, aiming at certain levels of growth or reducing risk that is not systemically controlled. Others have a broad investment objective for example, low cost investing.
The kind of unit trusts, OEICs and investment trusts you choose to use will depend on both the timeframe you invest in and your approach to risk. Younger investors might prefer to take on a higher amount of risk, and therefore choose funds that include a higher percentage of stocks. However, those approaching retirement or have obligations to their families might want to choose an easier risk and choose a fund with a higher percentage of bonds.