Saving money to invest in a long-term purpose is a satisfying experience. There are a myriad of investment options that are available, each of which offers an opportunity to earn returns that beat inflation. It’s important to think about the different kinds of investments and how they can fit into your overall financial plan.
Funds and investments
A fund is a group investment where you and other investors’ money is pooled and invested in a variety of assets. This spreads your risk since you don’t have to rely on the performance of only one type of asset. For instance, a UK Equity Fund will comprise of shares from various British companies.
There are also funds that offer a variety kinds of assets, or certain sectors that are more specific. This means there is a fund for any investor, regardless of their level of experience, investment timeframe or approach to risk.
Bond funds are one of the most popular investments. They are made up of IOUs (debt) – typically from companies or governments – and are an investment that is less volatile than stocks. They are impacted by changes in interest rates as well as the credit rating.