The investment process is a great way to meet your long-term financial objectives and grow your money. It is also possible to accomplish this with the help of a professional adviser, who can help you to balance your financial situation and level of comfort with risk versus the need to increase your potential growth and the security of your principal.
Investment funds pool your savings as well as those of other investors. A fund manager can purchase, hold and even sell investments on your behalf. Most funds are made up of a mixture of assets, which can help lower the risk of investing. However, some funds are more specific than others, such as funds that are focused on property or commodities. Multi-asset funds may hold an array of different types of assets, such as shares and bonds.
Certain funds are geared towards specific regions or segments like green or emerging markets. A lot of funds have specific goals for investing, like cutting down on unsystematic risks, or aiming at a certain amount of growth. Others have a more general investment aim, such as low-cost investing.
Your investment timeframe and your approach to risk will determine the kind of unit trusts, OEICs, and investment trusts that you choose. For instance, investors who are younger are generally more comfortable taking more risk and may be more likely to select funds with an increased proportion of equity. However, those close to retirement or have family obligations may prefer to take a lower level of risk and pick a fund that has more bonds.