Why do I need to invest?

We all have reasons to save. The holiday of a lifetime, a family wedding, an extension to your home or helping a child to get started on the property ladder. To save you need dedication - after all, saving means giving up today, in order to enjoy the future.

When investing there are few simple questions you need to ask yourself:

• How much risk am I prepared to take?

• What sort of return do I expect?

• How long do I need to invest for?

Generally speaking, the longer the investment term, the more risk you can afford to take and therefore attempt to maximise the return on your investment.

I have a sum of money. What are my options?

• One option is to put your money in the bank or building society. Your capital is secure but, if interest rates are low, the potential for growth is minimised.

• Investing in company stocks and shares is another option. This option may offer excellent growth potential in return for varied levels of risk to your capital. It has been demonstrated that over the medium to long term, equity investment (stocks and shares) consistently outperform deposit accounts.

By spreading your investment over a wide range of shares, you reduce your exposure to risk. If one share falls, another may rise and this balances out performance. The easiest and most cost effective way to invest in a wide range of stocks and shares is to invest your money in a bond. This will give you access to the stock market through unit linked funds and allows you to decide on the level of risk and return that best suits you.

Here are some frequently asked questions which people often have in relation to Investments.

• What are unit linked funds?
• Who manages my investment funds?
• Can I take an income from my investment bonds?

What are unit linked funds?

Unit linked funds enable the investor to invest across a diversified range of stocks and shares, property and cash assets. The investments are grouped into funds under a common theme. A sector fund contains stocks and shares from specific industries. Some funds can be invested in specific assets only, for instance Property Funds or Cash Funds.

Managed funds, in contrast, contain shares from many sectors and countries and can also contain investments in property and government gilts.

Who manages my investment funds?

As independent brokers, we are in a position to recommend an individual fund manager from any company we deal with, or a combination of fund managers whichever advice suits the specific requirements of the individual.

Can I take an income from my investment bonds?

Yes, you can arrange an income from your investment when you take out the bond or at a future date.

By regular withdrawals: You can take an income monthly, quarterly, half yearly and it can be paid into a bank or building society account. The minimum amount that can be withdrawn varies for each company.

By partial encashment: You can withdraw money from the bond whenever you require, simply by instructing us in writing. The minimum amount that can be withdrawn varies for each company. We would recommend that the combined value of any regular income and partial encashment should remain below a level commensurate with current interest rates and allowing for reasonable expectations of growth on the bond.