The investment process is a great way to reach your long-term financial goals and increase the value of your savings. It can also be done in conjunction with the assistance of expert advisors to help you ensure that you have the right amount of principal protection and some growth potential with your financial situation and your comfort with the risk.
Investment funds pool your savings with those of other investors. A fund manager will then buy, hold and sell investments on your behalf. The majority of funds comprise a mixture of risk calculation for portfolio approach assets which reduces the risk of investing. However, some are more specialised than others, for instance funds that are focused on property or commodities. Multi-asset funds could hold an array of different types of assets, like bonds and shares.
Certain funds are targeted towards certain regions or sectors for instance, emerging markets or green investment. They also have a variety of specified investment aims for instance, aiming at specific growth levels or reducing risks that are not systemic. Others have a general goal for investing like low cost investing.
The kind of unit trusts, OEICs and investment trusts you select will depend on your investment timeframe and your approach to risk. For instance, younger investors are generally more comfortable taking risks that are higher and are likely to choose funds with greater proportions of equity. Alternatively, those who are approaching retirement or have family obligations may prefer to take less risk and choose a fund with a higher percentage of bonds.