The investment process can be a fantastic way to grow your funds and reach your long-term financial goals. It is also possible to do this with the assistance of a professional advisor, who can help you manage your financial situation and your level of comfort with risk versus the need to grow your portfolio and the protection of your principal.
With the investment funds, your and other investors’ savings are put together. The fund manager will purchase, hold and sell investments on your behalf. The majority of funds comprise different assets, which reduces investment risk. Some funds are more specialised in nature, for instance, ones that focus on commodities or property. There are also multi-asset funds that could contain a mix of different types of assets, including shares and bonds.
Some funds are geared toward certain regions or sectors, such as green investments or emerging markets. A lot of funds have specific objectives for investment, such as reducing unsystematic risks or aiming for a certain level of growth. Others have a broad investment objective, such as low cost investing.
The kind of unit trusts, OEICs and investment trusts you choose to use will depend on the timeframe you invest in and your approach to risk. For instance, younger investors are generally more comfortable taking greater risk and are likely to select funds that contain more equity-based investments. For those who are nearing retirement or with family obligations may prefer to take less risk and select funds that have more bonds.