| If you know more or less all there is to know | | | | interest in the stick market, compared to the rate |
| about investing directly in stocks and shares, or in | | | | attached to the bond itself. |
| collective forms of investment, or the | | | | "Collective" Investment |
| management of your investments, or the tax | | | | If you want to avoid putting all your eggs in the |
| implications, or the pros and cons of offshore | | | | one basket of a particular company's shares, it is |
| investing, then you might not need much more in | | | | possible instead to spread the risk of your |
| the way of financial investment advice. Unless you | | | | investment by pooling it (with other investors) into |
| happen to be one of those very rare individuals, | | | | a range of different investments. In this case, the |
| however, you will almost certainly benefit from | | | | pooled investment is managed by a professional |
| the sound and impartial financial investment advice | | | | fund manager, who makes decisions on the range |
| of a professional, independent financial adviser. | | | | and types of investment. Such collective schemes |
| Types of Investment | | | | fall - again, broadly - into three different types: |
| Direct Investment | | | | unit trusts, investment trusts and Open-ended |
| Your choice of investment types fall into two | | | | Investment Companies (OEICs). |
| basic categories - direct investment in the shares | | | | Once you have reached this level of investment |
| of a particular company or its issued bonds or, in | | | | decision-making, however, the vast range of unit |
| the case of government-issued bonds, its | | | | trusts, investment trusts and OEICs available can |
| "gilt-edged stock". The price of company shares, | | | | open up a veritable Pandora's Box of choices. In |
| of course, will fluctuate as they are traded on the | | | | order to avoid making potentially very costly |
| stock market and the dividends to which you are | | | | mistakes or rash investment decisions, therefore, |
| entitled as an owner of those shares will be | | | | this is the stage at which - if you have not done |
| determined by the performance of that particular | | | | so before - you should consult an independent |
| company. | | | | financial adviser. |
| In the case of bonds issued by a company, or | | | | Summary |
| gilts issued by the government, however, you will | | | | Financial investment advice is wisely taken |
| be assured of the rate of interest on what is | | | | because of the sheer range of investment |
| effectively your loan to that company or the | | | | vehicles available:o These fall into the two broad |
| government, and you will be assured of the full | | | | categories of direct investment or "collective" |
| return on your investment once the bond or | | | | (pooled) investment;o Direct investments include |
| government stock reaches its maturity date. | | | | the purchase of stocks and shares or corporate |
| Because of these in-built certainties, there is a | | | | or government (so-called "gilt-edged" stock);o The |
| lower risk inherent in the investment in corporate | | | | principal types of collective investment are in unit |
| bonds or government gilts, and the returns, | | | | trusts, investment trusts or Open-ended |
| therefore, tend to be lower than in the more | | | | Investment Companies (OEICs);o Whatever your |
| volatile market for shares. | | | | personal intuition regarding the best investment |
| Both corporate and government bonds can be | | | | type for you, however, the best financial |
| traded in the market, however, before they | | | | investment advice is going to come from an |
| reach their maturity date. During this time, their | | | | independent financial adviser. |
| price will be determined by the prevailing rates of | | | | |