Investment is a great strategy to meet your long-term financial goals and also grow your wealth. It’s also something that can be done in conjunction with the assistance of professional advisers, who help you to balance the need for primary protection and potential growth against your financial situation and your comfort with risk.
Investment funds pool your savings with the savings of other investors. A fund manager will buy, hold and sell investments on your behalf. Most funds consist of different assets, which reduces investment risk. However, some funds are more specific than others, like funds that are focused on property or commodities. Multi-asset funds may hold a mix of different asset classes, including bonds and shares.
Certain funds are focused on particular regions or segments such as emerging markets or green investment. There are also funds that have a range of investment goals that are specific, for instance, targeting certain levels of growth or reducing risk that is not systemically controlled. Others have a broad investment objective that include 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. For instance, younger investors are generally more comfortable taking risks that are higher and may be more inclined to choose funds that have more equity-based investments. On the other hand, those nearing retirement or with family commitments might prefer to take a lower level of risk and select funds that have more bonds.