Saving money to invest in a long-term purpose is a satisfying experience. There are many different investments that are available, each with the potential for a return that can beat inflation. It is important to think about the various types of investment and how they align with your financial goals overall including your tolerance to risk.
Funds and investment
A fund is a collective investment where you and other investors’ funds are pooled together and then invested in a range of assets. This spreads the risk since you aren’t relying on the performance of one type of asset. For instance, a UK equity fund would be comprised of shares of various British companies.
However, you can also find funds that provide a variety of kinds of assets or specific sectors. This means that there is an investment that will suit any investor, regardless of their level of expertise, investment timeframe or approach to risk.
Bond funds are a well-known option for investing. They are comprised of IOUs (debt) generally from government or corporate entities – and are a less volatile option than stocks. They are impacted by changes in interest rates and the credit rating.