Not everyone needs to know about investing. The more so because the finance is quite a complicated matter, which is characterized by a large variability for this, so you should always control what our invested funds look like. Although our savings can be paid to the bank for a deposit and not to worry about anything, we will not achieve such investments of great profits. Perhaps it is better to entrust our money to professionals who know how to multiply money? If we decide to do so, it is best to look for an Investment Fund Company and deposit money into it.
Investment Funds are financial “institutions” that invest in the funds that their clients have paid them. Specialists work in them, who theoretically should know what to do to make the money bring the greatest profit. Unfortunately, this is not always the case, a little later. Anyone who wants to multiply their savings in investment funds must open his account in it. Usually this is done via the Internet. Once we have it behind us, we acquire participation units in a given fund and we wait with the hope that the value of the units will grow, thanks to which we will be able to sell them in the future with profit.
What funds are offered by TFI
Each Investment Fund Company offers to its clients many types of funds or even sub-funds. They differ in the instruments in which they invest their clients’ funds, and this in turn affects the risk of losing the funds deposited.
Cash (cash) and bond funds are the safest for clients. They invest in vouchers, bonds or even deposits in banks. Because these are very safe instruments, the risk of losing money is virtually non-existent here. Unfortunately, we must be prepared that the profits generated will not be too high.
If we are willing to risk a bit more, we can deposit our money into a fund of sustainable or stable growth. In this kind of funds, the money is divided into two groups (depending on the Society in various proportions). The part is invested in safe instruments (bonds, treasury bills), and some in risky (eg shares). By donating our funds to such funds, we can “earn” much more, but there is also a better chance that we will lose some of our money.
If we like the risk, but in return, we want to achieve high profits, we should put our money into an equity fund, where most of the funds are invested in the stock market. As we know, the Warsaw Stock Exchange is a place where you can earn a lot of money in a quick way, but you can also lose all your property there. So if we deposit money into such a fund, we must be prepared that the units that we buy may lose their value.
How to choose the best fund
The choice of the fund to which we pay the money should be determined by several factors. First of all, we must take into account our propensity to risk. If we have a gambler’s line, the choice of equity funds seems obvious. If we prefer to sleep peacefully – for example, a bond fund will be an ideal solution for us.
Another factor that influences the selection of the fund is our age. According to specialists, young people can afford more risky funds, because in the perspective of many years, the chances of getting a profit from such investments increase. Older people, on the other hand, should invest in safer instruments in order not to lose their funds.
It is also good to diversify your investments, which is best to divide our financial resources into several funds. Then the risk of losing them is significantly reduced, because if we lose our money in one fund, then another can bring us profits.
Investment costs in investment funds
We need to be aware that investing in funds involves certain costs. First of all, TFI charges a management fee for the management of investment funds. Their amount depends on the degree of investment risk. In the case of safe funds, the commission usually does not exceed 1%. If, on the other hand, we decide on risky investments, we also have to reckon with commissions up to 4%. Some TFI also charge a fee for the purchase or sale of participation units, however, usually they are not large amounts.
Is it worth to multiply your money through investment funds? Everyone has to answer such a question himself. For sure if we have no idea how to multiply our money, it can be a good solution. However, we must realize that this is accompanied by a certain risk and costs, so we must analyze ourselves whether it is worth buying shares in some fund.