It is a great method to reach your long-term financial goals and to grow your savings. It is also possible to accomplish this with the assistance of an experienced adviser, who can help you to balance your financial situation and your level of comfort with risk against the need to increase your potential growth and the protection of your principal.
With investments, your and the savings of other investors are put together. A fund manager buys securities, holds them, and sells them on your behalf. The majority of funds are comprised from a mix of assets, which can help to reduce risk associated with investing. However, some funds are more specialized than others, for instance funds that concentrate on property or commodities. There are also multi-asset funds that can hold a mix of different types of assets including shares and bonds.
Certain funds are geared toward certain regions or sectors like emerging markets or green investment. Many also have a range of specified investment aims for example, such as targeting specific growth rates or reducing unsystematic risk. Others have a more general investment objective, for instance, low-cost investing.
Your investment duration as well as your attitude to risk will determine the kind of unit trusts, OEICs, and investment trusts you select. For instance, investors who are younger are more likely to accept more risk and may be more likely to choose funds with more equity-based investments. However, those who are approaching retirement or who have family commitments might prefer to take a lower level of risk and choose a fund with more bonds.
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