Investments can be a great method to increase your wealth and meet your long-term financial goals. It’s a process that can be done with the assistance of professional advisors, who can help you make sure you are balancing the need for principal protection and some potential growth against your financial circumstances and comfort with the risk.
Investment funds pool your savings as well as those of other investors. A fund manager then purchases securities, holds them, and sells them on your behalf. The majority of funds are different assets, which reduces investment risk. Some funds are more specialised, such as those that concentrate on property or commodities. There are also multi-asset funds which might hold a mix of various asset types, including bonds and shares.
Certain funds are targeted towards specific regions or sectors for instance, emerging markets or green investment. A lot of funds have specific investment objectives, for instance, reducing unsystematic risks or aiming at a certain amount of growth. Others have a general investment goal, such as low cost investing.
The type of unit trusts OEICs and investment trusts you select will depend on both the timeframe you invest in and your risk tolerance. Younger investors may prefer to accept a higher degree of risk, and thus choose funds that contain a higher percentage of stocks. However, those who are approaching retirement or with family commitments may prefer to take less risk and opt for a fund that has more bonds.