Savings and Investments Series: Planning Your Savings and Investments

SAVINGS AND INVESTMENT PLANNING – A QUICK TOUR
Before getting down to any serious financial planning, it is useful to have a working knowledge of the main types of assets in which you can save or invest.

There are many different types of assets, each with its own particular combination of benefits and drawbacks, but the most important ones are summarized below.

The three most popular savings and investments assets are cash deposits, bonds and real assets such as shares and property. Placing some of your funds into each of these is often a good investment strategy, because it balances security of capital with an opportunity for growth.

As well as buying these assets directly, it is possible to invest in them indirectly through funds which are managed by professionals. A fund is an investment vehicle which pools the money of investors and invests it accordingly to a defined set of investment objectives. For example, a company with profits fund can allow exposure to all these asset classes, while removing some of the risks involved in the timing of the investment using a process called ‘smoothing’.

However, the best option for you will depend on your own particular circumstances, preferences and objectives.

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