Investing – What You Need to Know
The investment process can be a fantastic way to grow your funds and reach your long-term financial goals. It can also be done with the assistance of professional advisors to help you balance the need for principal protection and some potential growth against your financial situation and your comfort with the risk.
Investment funds pool your savings and the savings of other investors. A fund manager then buys or holds investments and sells them on your behalf. Most funds are made up of a mixture of assets, which helps lower the risk of investing. Some funds are more specialised like ones that focus on property or commodities. There are also multiasset funds that can hold a mix of different asset types, including shares and bonds.
Certain funds are geared towards a specific region or sector, such as green investments or emerging markets. A lot of funds have specific objectives for investment, such as reducing unsystematic risks or aiming to achieve a certain level of growth. Others have a more general goal, like low-cost investing.
Your investment duration and your approach to risk will determine the kind of unit trusts, OEICs, and investment trusts that you choose. For example, younger investors tend to be more comfortable with a higher level of risk and may be more inclined to choose funds that have a larger proportion of equities. Alternatively, those approaching retirement or who have family commitments might want to take on less risk and choose funds that have more bonds.
