How to select investment products
When investing in index funds, you first need to complete some due diligence and take into careful consideration the risks and benefits of each fund.
Does the fund match the performance/income/growth that you require? Can you tolerate the levels of risk involved with that fund? Are the companies considered “ethical” if this is important to you? These are the types of questions you should be asking.
If you are uncertain about how to invest in funds that match your goals on your own, a list of the top-performing funds such as the one above may be useful to you. However, the list above is not exhaustive and you may wish to consider other funds too.
Remember to always research the source of the information, and make sure it came from an accredited financial analyst or someone that you can trust would understand the markets well enough to give an unbiased and impartial view.
When it comes down to choosing a fund, the level of risk you can tolerate is an important factor to consider, as the higher the risk (generally) the higher the rate of expected growth and losses too. With a lower risk fund providing a slower growth rate, but potentially more reliable returns. Which of these options is preferential, is entirely up to you as an investor.
With each fund you research, there should be an indication of the level of risk associated with it, so it’s important for you to decide in advance what your risk tolerance is, to speed up and clarify your decision making. Many funds are given a level of risk rating by independent firms, which may also wish to incorporate into your decision process.
To make the process of choosing a fund easier, there are companies that offer investment accounts with a wide range of funds to choose from, such as stocks and shares isas, pension funds, general accounts, and funds for your children.