Investment is a great strategy to meet your long-term financial goals and also grow your capital. It’s also something that can be accomplished with the help of professional advisers, who help you to make sure you are balancing the need for principal protection and some potential for growth against your current financial circumstances and comfort with the risk.
With investment funds, your and the savings of other investors are pooled together. A fund manager then purchases, holds and sells investments on your behalf. The majority of funds comprise various assets, which reduces risk of investment. However, some are more focused than others, such as funds that focus on property or commodities. Multi-asset funds could hold various asset classes, including shares and bonds.
Certain funds are targeted towards a specific region or sector, such as green or emerging markets. They also have a variety of specific investment objectives for instance, aiming at specific levels of growth or reducing risk that is not systemically controlled. Others have a common investment goal, such as low cost investing.
The kind of unit trusts, OEICs and investment trusts you select will more depend on both your investment timeframe and your approach to risk. For instance, younger investors are generally more comfortable taking more risk and may be more inclined to select funds with an increased proportion of equity. For those who are nearing retirement or with family commitments may prefer to take less risk and choose an investment with more bonds.