Investment is a great strategy to meet your long-term financial goals and increase the value of your wealth. It is also possible to accomplish this with the assistance of an experienced advisor who can help you balance your financial situation and your comfort level with risk against the need for some growth potential and the protection of your principal.
With the investment funds, your and the savings of other investors are put together. A fund manager then buys or holds investments and sells them on your behalf. Most funds are made up of a mixture of assets, which helps reduce the risk of investing. Some funds are more specialised for instance, like those that concentrate on commodities or property. There are also multiasset funds that could contain a mix of different types of assets, including bonds and shares.
Some funds are geared toward a specific region or sector like emerging markets or green investments. Many funds have investment goals, such as reducing unsystematic risks or aiming to achieve a certain level of growth. Others have a general goal for investing for example, low cost investing.
The kind of unit trusts, OEICs and investment trusts you choose will depend on the length of your investment period and your risk tolerance. Younger investors might be more willing to accept a higher amount of risk, and consequently, choose funds with a greater proportion of stocks. On the other hand, those nearing retirement or have obligations to their families may choose to take a lower level of risk and select a portfolio that has more bonds.