Saving money to invest in a long-term goal is a satisfying experience. There are many different investment options available each with the possibility of a return that may beat inflation. But it’s important to consider the various types of investments and how they fit with your financial goals overall including your tolerance to risk.
Funds and investments
A fund is a collective investment where you and other investors’ funds are pooled and then placed in a variety assets. This helps spread your risk since you’re not relying on the performance of just one asset type. For instance, a UK equity fund will be comprised of shares from various British companies.
But, you can also find funds that offer various kinds of assets or specialist sectors. This means that there is an investment that will suit all investors, regardless of level of experience, investment timeframe or approach to risk.
Bond funds are among the most sought-after investments. They are comprised of IOUs (debt) generally from government or corporate entities – and are an investment that is less volatile than stocks. However, they can be affected by interest rate changes and the credit rating of the issuer.