Taking On Board Some Sound Tips for the Cautious Investor

By Tony Levene

Part of Investing For Dummies Cheat Sheet (UK Edition)

Not everyone wants to jump in at the deep end. If you’re a cautious investor and you think the time is right, you may want to try one or some of the following:

  • A bond fund. Your money goes into fixed-interest securities tied either to governments or companies.

  • A mixed fund. This type of fund focuses on a mix of lower-risk shares, bonds, cash and property.

  • A targeted absolute return fund. The idea here is to achieve a steady return from a variety of assets, whatever financial market conditions might be. The ‘target’ is the percentage the fund’s managers attempt to produce above the interest you could get in a typical bank account.

  • A tracker fund. This type of fund follows a stock market index such as the FTSE 100 – or the Footsie – up and down. This option is good if you want to invest in shares but have no idea which ones to buy or which fund manager to back. But don’t forget: an index can be all over the place!