Whether you are new to investing or a seasoned saver, there are always things you can learn to improve how you pick your investments. In this new series, Telegraph Money will give advice aimed at both beginners and experts who want to buy a range of different assets.
First up is funds – one of the most common ways investors can dip their toes into the stock market. The below is by no means an exhaustive list of everything you need to know but it will give some food for thought.
Picking a fund shop
The first thing to decide, as someone who has not invested before, is which company to entrust your savings with. If you are investing a large lump sum of more than £50,000 for example, a fund shop with a flat monthly fee will be cheapest.
For someone investing monthly, avoiding fund shops that have high transaction costs will be important, as some will charge you for each new purchase every month.
Should you invest in active or passive?
Once you have decided who to invest with, the next step is to decide what to buy. There are two types of funds.
Passive funds, also known as trackers, aim to replicate the performance of a stock market index