Investments can be a great method to increase your wealth and reach your long-term financial goals. It’s a process that can be done in conjunction with the assistance of expert advisers, who help you to balance the need for principal protection and some potential for growth against your current financial circumstances and comfort with the risk.
With the investment funds, your and the savings of other investors are put together. A fund manager then purchases, holds and sells investments on your behalf. Most funds are made up from a mix of assets, which can help lower the risk of investing. However, some funds are more specialized than others, for example funds that focus on property or commodities. Multi-asset funds could hold several types of assets, like bonds and shares.
Some funds are geared towards specific regions or segments like green or emerging markets. They also have a variety of investment goals for example, such as targeting specific growth rates or reducing unsystematic risk. Others have a more general objective, for instance, low-cost investing.
Your investment period as well as your attitude to risk will determine the kind of unit trusts, OEICs, and investment trusts you select. Younger investors may prefer to take on a higher degree of risk, and therefore choose funds with a greater proportion of stocks. However, those who are approaching retirement or with family commitments might prefer to take a lower level of risk like it and opt for a fund that has more bonds.
