Investing is a great way to reach your long-term financial goals and increase the value of your capital. It is also possible to achieve this with the assistance of a professional adviser, who can help you to balance your financial situation and your comfort level with risk versus the need for 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 will purchase, hold and sell investments on your behalf. The majority of funds are comprised from a mix of assets, which can help reduce investment risks. However, some are more specialised than others, for example funds that concentrate on property or commodities. Multi-asset funds could hold various asset classes, including bonds and shares.
Certain funds are targeted towards particular regions or sectors like emerging markets or green investments. Many also have a range of specified investment aims for instance, aiming at specific growth levels or reducing risk that is unsystematic. Others have a broad investment objective like low cost investing.
The type of unit trusts, OEICs and investment trusts you select will depend on the timeframe you invest in and your approach to risk. Younger investors might be more inclined to accept a higher level of risk and thus choose funds that have a higher percentage of stocks. For those who are nearing retirement or with family obligations may prefer to take less risk and select a fund that has more bonds.