Investments can be a great way to grow your funds and meet your long-term financial goals. It is also possible to accomplish this with the assistance of a qualified advisor, who can assist you in balancing your financial situation and your level of comfort with risk against the need for some growth potential and the protection of your principal.
With investment funds, your as well as other investors’ savings are put together. The fund manager then buys the investments, holds them and then sells them on your behalf. Most funds are made up of a mix of assets, which can help to reduce risk associated with investing. However, some are more specialised than others, like funds that concentrate on property or commodities. There are also multi-asset fund that can hold a mix of different asset types, such as bonds and shares.
Some funds are geared towards specific regions or segments like green or emerging markets. Many also have a range of investment goals that are specific such as focusing on specific growth rates or reducing risks that are not systemic. Others have a more general goal, like low-cost investing.
The kind of unit trusts, OEICs and investment trusts you select will depend on both your investment timeframe and your approach to risk. Younger investors might be more willing to take on a greater level of risk and consequently, choose funds that have a higher percentage of stocks. However, those close to retirement or have obligations to their families may prefer to take an easier risk and choose a fund that has more bonds.
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