Saving money to invest in a long-term goal is a satisfying experience. There are a variety of investments that are available, each more with a potential return which can beat inflation. However, it is crucial to consider the various types of investment and how they relate to your overall financial goals and your level of tolerance for risk.
Investment and funds
A fund is an investment that pools your money and the money of other investors and invests it into different types of assets. This spreads risk since you don’t have to rely on the performance of one asset type. For instance, a UK equity fund would be comprised of shares from various British companies.
However, you can find funds that provide various types of assets, or even more specific sectors. There is a fund for each investor, no matter the level of their expertise, investment timeframe, or the risk tolerance.
Bond funds are a popular choice of investment. They are comprised of IOUs (debt) usually from governments or companies – and can be an investment that is less volatile than stocks. However, they can still be affected by changes in interest rates and the credit rating of the issuer.
