Saving money to invest in a long-term goal is a satisfying one. There are a lot of different investment options available and each has a potential return that can beat inflation. However, it is crucial to consider the different types of investment and how they align with your overall financial goals especially your tolerance for risk.
Funds and investment
A fund is a group investment in which your and other investors’ funds are put together and put into a variety of assets. This helps to spread your risk as you are not dependent on the performance of a single asset type. For instance the UK Equity Fund is made up of shares from several British companies.
But, you can also find funds that provide a range of different kinds of assets or specific industries. There’s a fund for all investors, regardless of what their level of expertise and investment timeline, or their risk tolerance.
Bond funds are a popular choice of investment. They are comprised of IOUs (debt) generally from government or corporate entities – and can be a less volatile option than stocks. They can be affected by changes in interest rates and the credit rating.