There’s something gratifying about saving money over time to save for a long-term goal. There are many different investments available, each offering an opportunity to earn a profit that could beat inflation. But it’s important to consider the various types of investment and how they fit with your financial goals overall including your tolerance to risk.
Funds and investments
A fund is a collective investment in which your and other investors’ funds are pooled together and then placed in a variety assets. This spreads risk as you don’t rely on the performance of a single type of asset. For example the UK equity fund would be comprised of shares of various British companies.
There are also funds that offer a variety asset types, or even sectors that are more specialized. There’s a fund for any investor, regardless of the level of their expertise or investment timeframe or the risk tolerance.
Bond funds are among the most sought-after investments. They are a mix of IOUs, or debt, typically issued by governments or companies. They can be less volatile than stocks. They are impacted by changes in interest rates and the credit rating.