Saving money to invest in a future goal is a satisfying experience. There are plenty of different investments to choose from and each has the possibility of a return that may beat inflation. However, it is crucial to consider the various types of investments and how they fit with your overall financial goals, particularly your tolerance for risk.
Investments and funds
A fund is an investment that pools your money and the money of other investors and invests it in different types of assets. This helps spread the risk since you’re not dependent on the performance of one asset type. For example an UK Equity Fund would consist of shares from a variety of British companies.
However, you can also find funds that provide an array of different kinds of assets or specific industries. This means that there’s a fund that is suitable for every investor regardless of their level of expertise, investment timeframe or risk-taking approach.
Bond funds are a popular option for investing. They are made up of IOUs (debt) usually from companies or governments – and are a less volatile option than stocks. However, they can be affected by changes in interest rates and the credit rating of the issuer.
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