Investment is a great strategy to reach your financial goals and to grow your wealth. It is also possible to accomplish this with the help of a professional advisor, who can assist you in balancing your financial situation and your level of comfort with risk, balancing the need to increase your potential growth and the protection of your principal.
Investment funds pool your savings as well as the savings of other investors. A fund manager can buy, hold and sell investments on your behalf. The majority of funds are different assets, which reduces risk of investment. However, some are more focused than others, such as funds that concentrate on property or commodities. There are also multi-asset funds which can hold a mix of different types of assets, such as bonds and shares.
Some funds are geared toward particular regions or sectors like emerging markets or green investments. Many funds have specific investment goals, such as the reduction of unsystematic risk or aiming for a certain degree of growth. Others have a common investment goal for example, low cost investing.
The type of unit trusts, OEICs and investment trusts you choose to use will depend on the length of your investment period and your risk tolerance. For example, younger investors tend to be more comfortable with a higher level of risk and may be more likely to select funds that contain an increased proportion of equity. However, those who are approaching retirement or with family commitments may prefer to take less risk and choose funds that have more bonds.
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