Saving money to invest in a future goal is a satisfying one. There are a lot of different investment options available and each has the possibility of a return that may beat inflation. It is important to think about the various types of investment and how they are a good fit with your financial goals overall, particularly your tolerance for risk.
Funds and investment
A fund is a collective investment in which your and the other investors’ funds are put together and put into a variety of assets. This spreads risk as you don’t rely on the performance of only one type of asset. For example an UK Equity Fund is made up of shares from several British companies.
However, you can find funds that offer an array of different types of assets, or even more specialist sectors. This means that there’s a fund to suit every investor regardless of their level of experience, investment duration or risk-taking approach.
Bond funds are a popular choice of investment. They are a combination of IOUs, or debt, typically from government agencies or companies. They are less volatile than stocks. However, they could be affected by interest rate changes and the credit rating of the issuer.
