Saving money to invest in a long-term goal is a rewarding experience. There are many different options to choose from – each one offers the possibility of a return that may beat inflation. It is important to consider the different types and how they will fit into your overall financial plan.
Investments and funds
A fund is a collective investment where you and other investors’ funds are pooled and invested in a range of assets. This spreads your risk, since you aren’t relying on the performance of only one type of asset. For instance, a UK equity fund would be made up of shares from different British companies.
You can also find funds that cover a variety of asset types, or specific areas. There’s a fund for each investor, no matter how much experience they have, investment timeframe, or their risk tolerance.
Bond funds are a popular investment. They are a mix of IOUs, or debt, usually from companies or governments. They can be less volatile than stocks. They can be affected by changes in interest rates as well as the credit rating.