What is an investment?
Think of a famous company. Nike, Amazon or Microsoft for example. Investors buy tiny bits of companies like this in something called a (share). If the company does well, and so grows and makes profits for its shareholders, the value of your share can go up. If the company does poorly, like it makes a loss, the value of your share can go down. To put it simply: you buy a portion of a company and your investment can go down as well as up in value. Remember, you could get back less than you invested.
Fact is, you can invest in all kinds of things, as well as companies. Property, government bonds and even gold. You can buy them in the financial markets, a place where people buy and sell investments. As you’re about to see, you could make a significant profit from investments over the long term.
Experts can do all the hard work for you, Just like the dentist takes care of your teeth, estate agents help buy and sell your property and engineers fix your boiler, professionals can help invest your money too.
For instance, professional fund managers will pick and choose investments so you don’t have to. Think of a fund like a shopping basket containing the value of many investments. It could be a sensible way to manage your risk.