January 2012 (19 articles)

Categories: Financial News

Reflecting popularity in the market

An investment trust is a company with a set number of shares. Unlike an open-ended investment fund, an investment trust is closed ended. This means there are a set number of shares available, which will remain the same no matter how many investors there are. This can have an impact on the price of the shares and the level of risk of the investment trust. Open-ended investment funds create and cancel units depending on the number of investors.

Categories: Financial News

Participating in a wider range of investments

Unit trusts are collective investments that allow you to participate in a wider range of investments than can normally be achieved on your own with smaller sums of money. Pooling your money with others also reduces the risk.

Categories: Financial News

Open-Ended Investment Companies (OEICs) are stock market-quoted collective investment schemes. Like investment trusts and unit trusts they invest in a variety of assets to generate a return for investors. They share certain similarities with both investment trusts and unit trusts but there are also key differences.

Categories: Financial News

Acting in the investors’ best interests at all times

Open-ended investment funds are often called collective investment schemes and are run by fund management companies. There are many different types of fund.

Categories: Financial News

Investing in one or more asset classes

Investing in funds provide a simple and effective method of diversification. Because your money is pooled together with that of other investors each fund is large enough to diversify across hundreds and even thousands of individual companies and assets. A pooled (or collective) investment is a fund into which many people put their money, which is then invested in one or more asset classes by a fund manager.

Categories: Financial News

Are you investing for growth, income or both?

You should consider whether you are primarily investing for growth, income or both. If you want some income, but no risk to your capital, you could choose a money market or cash fund, which means a professional investor will be working to get the best available interest rates. If, however, you are willing to take some risk with your capital, you may wish to choose a fund that invests in bonds, which provide a rate of interest higher than is available with cash. Alternatively, there are equity funds that invest in shares of companies and seek to generate income rather than capital growth, aiming to pay out higher than average dividends. Funds that offer a mixture of both shares and bonds are known as managed funds.

Categories: Financial News

Increasing the long-term value of your investments

In the light of recent market volatility, it’s perhaps natural to be looking for ways to smooth out your portfolio’s returns going forward. Investing regularly can smooth out market highs and lows over time. In a fluctuating market, a strategy known as pound cost averaging can help smooth out the effect of market changes on the value of your investment and is one way to achieve some peace of mind through this simple, time-tested method for controlling risk over time.

Categories: Financial News

Don’t put all your eggs in one basket

When deciding whether to invest, it is important that any investment vehicle matches your feelings and preferences in relation to investment risk and return. Hence your asset allocation needs to be commensurate with your attitude to risk. Another key question to ask yourself is: ‘How comfortable would I be facing a short-term loss in order to have the opportunity to make long-term gains?’ If your answer is that you are not prepared to take any risk whatsoever, then investing in the stock market is not for you.

Categories: Financial News

What do you want to achieve from your investments?

You may find your investment goals change if you get married, have children, or start a business, so it could be an idea to switch your investments into different funds. And as you approach retirement, you may want to move your money gradually into investments that offer more security.

Categories: Financial News

Don’t miss out on using your tax-efficient allowance

An Individual Savings Account (ISA) is a tax-efficient wrapper. Within an ISA you pay no capital gains tax and no further tax on the income, making it one of the most tax-efficient savings vehicles available.