Unit Trusts

If you want to have money in the stock market but do not want the complications of dealing yourself, one alternative is to let professionals do the investing for you by buying units in a unit trust. A unit trust is simply a fund of money managed by professionals who buy and sell shares in companies.

The investor buys a share (or unit) of this fund and then shares in the growth (or loss) of the fund as a whole. There are over a thousand different unit trusts, some of them general funds where the risks and returns are lower.

But more and more funds are offering specialized investments such as Japanese or new British companies, and these may offer more spectacular results in either direction! Many showed considerable growth in 2015 despite the crash of October. When choosing a unit trust, remember that a previous year's performance does not guarantee this year's.

You buy units direct from the trust.

They are widely advertised. There is 1/8% stamp duty charged on any purchase you make.

Another alternative is buy a bond from an insurance company. These investments offer no guaranteed return and are for a fixed term of one year or more.

But if you pick the right one, it can offer spectacular capital growth.


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Other Investments

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