Investing can provide an excellent way to grow your money and meet your long-term financial goals. It is also possible to do this with the help of a professional advisor who can help you to balance your financial situation and level of comfort with risk versus the need to grow your portfolio and the protection of your principal.
Investment funds pool your savings and those of other investors. A fund manager then buys the investments, holds them and then sells them on your behalf. The majority of funds are comprised of a mix of assets, which helps reduce investment risks. Certain funds are more specialized, such as those that concentrate on commodities or property. There are also multi-asset funds that might hold a mix of different types of assets including bonds and shares.
Some funds are geared toward a specific region or sector, such as green or emerging markets. Many funds have specific investment goals, such as the reduction of unsystematic risk or aiming at a certain amount of growth. Others have a general investment goal that include low cost investing.
The type of unit trusts, OEICs and investment trusts you select will depend on both the timeframe you invest in and your approach to risk. Younger investors may be more willing to take on a greater level of risk and therefore, pick funds that contain a higher proportion of stocks. However, those nearing retirement or have family obligations might prefer an easier risk and select a portfolio with a higher percentage of bonds.