It is a great method to achieve your long-term financial objectives and grow your wealth. It can also be done in conjunction with the assistance of expert advisors, who can help you balance the need for primary protection and potential for growth against your current financial situation and confidence in the risk.
With investment funds, your as well as the savings of other investors are put together. The fund manager will purchase, hold and even sell investments on your behalf. Most funds are made up of a mixture of assets, which can help to reduce risk associated with investing. Certain funds are more specific for instance, like those that concentrate on property or commodities. There are also multi-asset funds that could contain a mix of different types of assets such as bonds and shares.
Certain funds are focused on particular regions or segments such as emerging markets or green investment. Many funds have specific objectives for investment, such as the reduction of unsystematic risk or aiming to achieve a certain level of growth. Others have a more general investment focus, such as low-cost investing.
The type of unit trusts, OEICs and investment trusts you select will depend on both your investment timeframe and your risk tolerance. Younger investors might be more inclined to take on a larger degree of risk, and therefore choose funds that contain a higher percentage of stocks. On the other hand, those nearing retirement or have family commitments might prefer to take a lower level of risk and choose an investment with more bonds.
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