The Pros And Cons Of Company Stock

Over the long term, shares usually outperform money held in cash or fixed interest Government gilts. There are also plenty of examples of a jump in returns from flotations as demand pushes up the price.

Past performance is not a guide to future performance.

But not all flotations result in a huge return overnight. Even when you get past the initial phase it can still be a rocky ride.

Should I Buy Apple Stock? 3 Pros, 3 Cons | InvestorPlace

As with much else in life, if you're prepared to take a risk and it pays off, you will reap the rewards - but there are no guarantees. Investing in a fund gives you the potential benefit of good performance with less exposure to the risks associated with investing directly in the shares of a handful of companies. Funds pool investors' money and can use it to buy a broad spread of assets including shares, bonds, gilts and property, so they could include a large number of different investments.

Taking this collective approach offers several benefits over investing directly in a small number of shares:. Although the value of your investment can still fall, having a broad range of investments within a fund means you're not tied to the fortunes of one or two companies. This means that if one performs badly, it will have a smaller impact on your return.

You may also find that whatever causes one company's share price to slide could be the very same thing that causes another company in your fund to perform well. Similarly if one asset class is not performing well, another may compensate for this poor performance. Investing in a fund also gives you access to a professional investment manager. As well as benefiting from their experience and expertise, fund managers often have access to information and research about companies that isn't readily available to the public.

This can give them an invaluable insight into how to invest your money. It can also be more cost-effective to invest in the stock market through a fund.

In a fund, these charges and the costs for professionally managing the fund are spread across all of the fund's investors. One type of fund which may be worth considering is the Foresters Friendly Society Order Insurance With Profits fund.

If you're interested in finding out more about this type of investment, why not take a look at our simple guide to With Profits savings. Please note that, dependent on the investment conditions when you withdraw your money, you may get back less than you paid in.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments.

We do not offer financial advice. You should contact a financial adviser if you want financial advice. You may have to pay a fee for this advice. This website uses cookies to improve your experience.

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Diversification Although the value of your investment can still fall, having a broad range of investments within a fund means you're not tied to the fortunes of one or two companies. Expertise Investing in a fund also gives you access to a professional investment manager. Cost It can also be more cost-effective to invest in the stock market through a fund.