Throughout your working life, you’ll save for all sorts of things – a new house, a wedding, a fantastic holiday or even the day when you’d like to stop working.

There are lots of products available that you can use to help you to save, but before you start, two things to establish are where should you invest your money and what products might be best for you? A lot depends on what your attitude to risk is – ask yourself these simple questions:

• Am I willing to accept some risk to my capital or is security more important for some or all of my money?
• What level of risk am I prepared to accept?
• How long can I keep my money invested for?

Your answers will help determine the type and balance of investments that will be best suited to you. You also need to decide if you want to receive an income from your investment or just leave it alone and let it grow. All this really depends on your age, lifestyle, other investments, commitments and responsibilities. You may not really know the answers to all these questions but your financial adviser will be able to discuss this with you to help you to find out what’s important to you.

Where you can invest your money tends to fall into different categories, depending on what you’re actually investing in and these are called asset classes. We’re going to cover the four main types of asset class in this podcast, which are equities, fixed interest securities, commercial property and cash.

• So what exactly are equities? –They are stocks and shares of companies either in the UK or worldwide. In the long term, equities can provide the best opportunity for a return on your investment - this usually means for a period of at least 5 years or more. If you were to look at a graph of the value of equities over the last 10 years, it would appear to have a lot of up and down movements showing them to be a volatile asset class, and often associated with a higher degree of risk – particularly over a shorter period of time. That’s why it’s so important to take a longer-term view because moments of poor performance can recover over time and there is much more potential for better growth prospects and therefore higher rewards.
  
• Fixed interest securities or gilts are more commonly known as bonds – either corporate or government bonds. Basically this is an IOU used to raise money. They are issued by a company to finance its business or by Government to pay for public spending. These are generally less volatile investments than equities but riskier than cash. Because of how they work - they are ideal investments to provide a steady stream of income.
• Commercial property is really what it says on the tin. An investment into shopping or industrial units, retail warehouses and office blocks. Investments into property
  are usually pooled together to create a fund which benefits from rental or lease income and also the potential of a rise in value of the property. Property has an important part to play in a balanced portfolio.
• And last but not least is cash. This is usually building society or bank accounts, giving you easy instant access to your savings but only a slow increase in value through interest payments. You can also invest directly into cash as part of a unit trust. Cash can provide a very good degree of security and is far less volatile than the other asset classes. It’s worth noting though that most cash investments don’t have any protection against inflation and they very rarely out perform the other asset classes.