Investments, Markets and Companies

One of the advantages of putting your money into a unit trust is that your money is pooled with other investors. This money is then managed by a fund management company like New Star. The key word in the last sentence is managed. A fund manager cannot directly access or withdraw the money of investors, so in that way you will not lose your money. However, when a company like New Star does begin to fail, the size of investors’ returns diminishes, in turn sparking more and more people to withdraw. In order to recoup the money lost by the withdrawals, the company has to sell its best assets, thus making the fund even less successful. Whether you stay or go is a tough decision, but rest assured you will not lose your investment.

The allure of tantalising returns on investments can often sound  irresistible, but one lesson that will most definitely be learned by people in these harsh financial times is that often the people with the most tantalising offers are often the companies that are next to go bust. Icesaves’ amazing interest rates, the $50bn hole in the economy left by Bernard Madoff’s pyramid trading are both examples that high rewards and consistent returns aren’t always what they’re cracked up to be.

One of the best ways to ensure your money is well looked after, and most importantly secure, is by investing it with a company with stability and proven success. One of the most reliable and longest established companies around is Legal and General. They are one of the biggest investors in the FTSE 100, and invest over £304bn worldwide. They have also been around as a company since 1836, which gives you a lot of reassurance in their stability and ability to provide you with a unit trust you can depend upon.  Another benefit is that Legal & General offer a variety of unit trusts for you to choose from, with varying degrees of risk, which are all explained clearly and honestly.