An Investment Strategy for Achieving so Much With So Little.

By Acceler8now.com Investing Education Team September, 2007

If you've heard so much about the benefits of investing and would like to give it a shot, you probably would worry about how to find the funds you need - unless you are reasonably liquid. A lot of people are not that funded and you could just be one. If you are, our resources on power-saving may prove helpful in building your capacity, over time. And, before you fall into that "investment-not-for-the-poor" resignation, there is an investment vehicle that can make it even easier for you to afford to invest. If you worry too that you do not know the ropes - and think that you can't learn enough from this website - no problem, what comes next is the sure-fire solution for you.

Ordinarily, investing in stocks, bonds, etc shouldn't heavily task your pocket or intellect. These securities are bought in units that are affordable. However, reaching a critical mass in volume and spread may take some time and a lot of money, which a small investor is likely to find daunting. That's where a collective investment scheme - a pooled-resource approach, with the benefit of specialised management - is an investment option that can set you free. It literally says, "if you really want it, you can do it".

A Platform for Repositioning
You know that nobody can force you to take any of these steps about your future, even if we know they are in your personal interest. We can only provide the facts and opinion and possibly advice you. Any decision, one way or another, can only be yours. Just to help eliminate as much of the possible hurdles as possible, we won't relent in going to great lengths to arm you with the ideas and information that can help you position your life for financial success. So, here, we present the opportunity to invest in unit trusts and managed funds. These fall within the realm of collective investments, where various investors adopt a pooled approach that offers its unique benefits. The US market is more known for mutual funds, which ultimately, work to the same effect and which have become very widely patronised. The UK and much of Europe find more comfort with the term 'unit trusts' and investors in those places have also found them attractive. The good news is that our financial market, too, can boast of investment funds that interested Nigerian investors can log into. We are not talking here of membership investment clubs, which in themselves are a useful platform for nurturing wealth. Unit trusts are a more institutionalised and fully regulated sector of financial market operations. Licensed and regulated by the Securities and Exchange Commission, unit trusts are a formalised channel for collective investing.

It could be said that this investment vehicle has been underexposed and under-utilized. Not many stock investors have ever invested with one, in spite of the obvious(?) benefits of using unit trusts. That is the irony: unit trusts would seem an ideal platform for our kind of environment where a large population of potential investors lacks any extensive knowledge about investing. So, while millions of investors in more informed markets like the US, where individuals have more access to a degree of basic investment education, are resorting to fund managers to benefit from their professional skills, those who would seem to need more help are not seeking it.

Unit trusts are a regulated investment fund, managed by professional fund managers, with various investors pooling funds together for investment. Participation is through acquiring units of the fund, just as you buy company shares. The pool of funds contributed by buying into the trust fund is then invested by the fund manager to generate returns for unit holders. A good performance also reflects in the value of the units which, in effect, enjoy value appreciation (and suffer depreciation in poor performance), like stocks. More importantly, the fund manager is able to spread the pool of funds into assets that the individual's personal contribution couldn't have covered, by this, allowing each participant access to market opportunities he wouldn't have had enough personal resources to partake in. And because their full time business is to manage funds - for which they are also trained - it is expected that errors are minimised, with better overall performance.

We hope this section helps you see how unit trusts can help you pursue your wealth-building strategy. As the caption here says, it is a strategy that helps the investor achieve a lot with so little. Good luck!


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