Many people who are seeing low return on their savings accounts often look to other ways they can increase the returns on their hard earned cash. And why not, money does not grow on trees or anywhere else, and it is only natural that those of hours of toil put in at the workplace should translate as a nice profitable return.
Subsequently, many people have looked at the stock market and its various investment vehicles as a way of making the money do the work. One method which is often favoured by all types of investors is investing via an investment fund.
Unless you have an exceptional insight into the stock market, investment funds offer a way of investing into the market without having to pick out individual stocks and shares, which unless you have a good insight into the markets and are a highly experienced player in the game, it is probably a good idea to avoid at least in the first instance.
Investing into an investment fund involves paying into a fund which is already invested into several areas of the market. There are different types of funds which are designed for different types of investor.
A key decision to be made which will affect your investments is how much risk you are willing to take with your money. You are probably familiar with the term risk vs. return and basically the higher risk the potential for a higher, more profitable return. The lower the risk and the return is less but in some instances may offer stable growth.
However, this is a very general description of risk vs. return, as it is possible that a more cautions fund will be prone to high risk factors and vice versa.
If you are an experienced investor you may already know which funds you are going to invest into for the coming year. You will know that a fund can do well one year but no so well the next. Nonetheless, like the beginning investor, you will probably do well to at least obtain guidance on investment funds from a good fund manager.
The key to a good fund manager is to choose one which is happy to only step in when they have to. Many financial companies and advisors step in at every opportunity which is paid for by the investor, and in many instances this is the only reason they do.
Whether you are a beginner, or a seasoned investor, try and find a fund manager or fund management company that is happy for you to have as much control as possible over your fund.