Investing is a great way to reach your financial goals and to grow your capital. It is also possible to achieve this with the help of a professional advisor, who will help you to balance your financial situation and your level of comfort with risk in order to allow for growth potential and the security of your principal.
Investment funds pool your savings as well as the savings of other investors. A fund manager then purchases, holds and sells investments on your behalf. Most funds comprise a mixture of assets which reduces the risk of investing. However, some funds are more focused than others, like funds that are focused on commodities or property. There are also multi-asset funds that might hold a mix of different asset types, including shares and bonds.
Certain funds are geared towards certain regions or sectors, such as emerging markets or green investments. A lot of funds have specific objectives for investment, such as decreasing unsystematic risks or striving at a certain amount of growth. Others have a general goal for investing for example, low cost investing.
The length of your investment period and your approach to risk will determine the type of unit trusts, OEICs, and investment trusts you select. Younger investors may be more willing to take on a higher level of risk and therefore choose funds with a greater proportion of stocks. Alternatively, those who are nearing retirement or have family obligations might prefer the risk at a lower level and pick a fund that has more bonds.
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