There’s something gratifying about saving money over time to put aside for a future goal. There are many different investments that are available, each of which offers an opportunity to earn a profit that could beat inflation. It is important to think about the different types of investment and how they relate to your financial goals overall including your tolerance to risk.
Investments and funds
A fund is a group investment in which your and other investors’ money is pooled and then placed in a variety assets. This helps to spread your risk since you aren’t relying on the performance of a single asset type. For example an UK Equity Fund will consist of shares from various British companies.
You can also find funds that have a variety asset types, or even sectors that are more specific. There is a fund for each investor, no matter what their level of expertise and investment timeline, or risk tolerance.
Bond funds are a popular investment. They are made up of IOUs (debt) typically from governments or companies and are a less volatile option than stocks. However, they can be affected by changes in interest rates and the credit rating of the issuer.