Investments can be a great way to grow your funds and achieve long-term financial goals. It is also possible to accomplish this with the assistance of a professional adviser, who can help you to balance your financial situation and 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 the savings of other investors are put together. A fund manager then purchases the investments, holds them and then sells them on your behalf. Most funds consist of a mixture of assets which reduces risk of investment. Certain funds are more specific for instance, like ones that focus on commodities or property. There are also multi-asset funds that may hold a mixture of different types of assets including bonds and shares.
Some funds are geared towards certain regions or sectors, for instance, emerging markets or green investment. A market risk management and risk calculations lot of funds have specific objectives for investment, such as the reduction of unsystematic risk or aiming for a certain level of growth. Others have a more general focus, such as low-cost investing.
The type of unit trusts OEICs and investment trusts you select will depend on the timeframe you invest in and your risk tolerance. Younger investors may prefer to take on a greater amount of risk, and thus choose funds that contain a higher proportion of stocks. Alternatively, those approaching retirement or with family obligations might prefer to take on less risk and choose funds that have more bonds.
