Pound cost averaging is an investing strategy that can help to smooth out the effects of market volatility and reduce your overall risk. Investing at regular intervals can be a good idea to help smooth out the ups and downs of the market.
There are many reasons to invest through a fund, rather than buying assets on your own. At a basic level, investing in a fund means having a fund manager make investment decisions on behalf of the investor.
Sharing many traits, but also having important differences
Pooled investment funds are usually large funds built by aggregating relatively small investments from individuals. A professional fund manager (or a team of fund managers) determines which assets to invest in and then purchases accordingly. They are also known as ‘collective investment schemes’.
An investment trust is a public company that raises money by selling shares to investors, and then pools that money to buy and sell a wide range of shares and assets. Different investment trusts will have different aims and different mixes of investments.
Minimising the amount of tax you pay on your investment returns
Individual Savings Accounts (ISAs) are a ‘tax-efficient wrapper’ enabling you to minimise the amount of tax you pay on your investment returns. Some ISAs give you instant access to your money and can be used to plan your finances for the short term.
