Saving money to invest in a long-term goal is a satisfying experience. There are a myriad of investment options that are available, each with an opportunity to earn a profit that could beat inflation. It is crucial to think about the various types of investments and how they will be incorporated into your overall financial plan.
Investments and funds
A fund is an investment that pools your money and the money of other investors and invests it in diverse assets. This helps to spread your risk since you aren’t relying on the performance of one asset type. For instance the UK equity fund will be made up of shares from various British companies.
There are also funds that cover a variety of asset types, or sectors that are more specialized. This means that there is an investment that will suit all investors, regardless of level of expertise, investment timeframe or risk-taking approach.
Bond funds are a popular choice of investment. They are comprised of IOUs (debt) – typically from government or corporate entities – and are a less volatile option than stocks. They can be affected by changes in interest rates and the credit rating.