Investment assets are what you invest in. You can either invest in them directly or you can invest in them through an investment fund such as a unit trust.
Each type of asset has its own characteristics and also has different risks associated with it.
Shares, also known as 'equities' buy you a small part of a company. This entitles you to a share of any profits the company makes. If the company is seen to be successful their shares may be wanted, pushing up the share price. Share prices do also fall.
Equities can invest in the growth potential of the UK, Europe, USA and the rest of the world.
There is no set maturity date. You can stay invested for as long as the company has shareholders. Lots of choice means it's possible to invest tactically in line with your objectives and timeframe.
The value of equities is not guaranteed and may fall as well as rise which could mean you losing some or all of your money.
Fixed interest securities are more commonly known as 'bonds'.
All bonds are basically IOUs – a promise to pay back your original investment at a set date in the future, plus payments at regular intervals between now and then. Some bonds are index linked and increase in line with inflation.
Bonds can be corporate bonds, issued by companies to raise money, or government bonds. UK government bonds are sometimes referred to as gilts.
Returns can come in two ways:
The value of fixed interest securities/bonds is not guaranteed and may fall as well as rise which could mean you receive back less than you originally invested.
In investment terms, property means commercial property such as offices, shops, warehouses, factories, leisure facilities and other business buildings.
Returns from commercial property can come in two ways:
The value of commercial property is not guaranteed and may fall as well as rise, which could mean you receive back less than you originally invested.
You may not think of cash as an investment but it's an important asset in its own right.
Although the returns from cash are generally lower than other asset classes over the long term, it has a number of useful attributes.
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