The investment process can be a fantastic method to increase your wealth and achieve long-term financial goals. It is also possible to accomplish this with the assistance of a professional advisor, who can assist you in balancing your financial situation and your comfort level with risk, balancing the need to increase your potential growth and the security of your principal.
Investment funds pool your savings and the savings of other investors. A fund manager buys the investments, holds them and then sells them on your behalf. The majority of funds are different assets, which reduces investment risk. However, some funds are more focused than others, for instance funds that are focused on property or commodities. There are also multi-asset funds which can hold a mix of different types of assets, including bonds and shares.
Certain funds are geared toward certain regions or sectors for instance, emerging markets or green investment. Many also have a range of specified investment aims such as focusing on specific growth levels or reducing risks that are not systemic. Others have a broad investment objective, such as low cost investing.
The kind of unit trusts, OEICs and investment trusts you pick will depend on the duration of your investment and your risk tolerance. Younger investors might prefer to take on a greater amount of risk, and consequently, choose funds with a greater percentage of stocks. However, those who are approaching retirement or with family commitments may prefer to take less risk and choose an investment with more bonds.