Saving money to invest in a long-term purpose is a satisfying experience. There are a lot of different investments to choose from and each has the potential for a return that will beat inflation. But it’s important to consider the different types of investment and how they are a good fit with your financial goals overall, particularly your tolerance for risk.
Investments and funds
A fund is an investment that pools your money with the money of other investors and invests it into a variety of assets. This spreads risk as you don’t rely on the performance of just one type of asset. For instance an UK equity fund is made up of shares from different British companies.
There are also funds that have a variety asset types, or even sectors that are more specialized. That means there’s a fund that is suitable for all investors, regardless of level of experience, investment duration or risk-taking approach.
Bond funds are among the most sought-after investments. They are a mix of IOUs or debt, generally from governments or corporations. They can be less volatile than stocks. They are impacted by changes in interest rates as well as the credit rating.