There’s something satisfying about saving money over time to put aside for a future goal. There are a myriad of investment options available, each offering 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.
Investment and funds
A fund is an investment that pools your money and the money of other investors and invests it in various assets. This spreads risk because you don’t depend on the performance of only one asset type. For instance the UK equity fund will be composed of shares from different British companies.
There are also funds that offer a variety asset types, or sectors that are more specialized. This means that there’s a fund that is suitable for all investors, regardless of level of experience, investment duration or risk-taking approach.
Bond funds are a popular investment. They are a mixture of IOUs or debt, typically from government agencies or companies. They can be less volatile than stocks. However, they can still be affected by interest rate changes and the credit rating of the issuer.