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Risk is the extent to which the value of your investments is likely to rise or fall.

All investments carry some degree of risk. A higher level of risk could bring the potential for greater return on your money, but there is also a greater chance the value of your investment could go down.

Before investing, you need to consider not only what you want to gain and how long you want to invest for, but also how much you can afford to lose if the markets were to drop significantly.

Equities, stocks and shares are all words used to describe owning a stake in a company.

When you buy shares, you’re effectively taking ownership of a small part of a particular company.

Investors buy and sell equity in the form of ‘shares’. If a company’s value increases, their value of the shares in that company also increase. And of course, if a company’s value decreases, the value of their shares decrease.

An investment trust is a listed company that raises money by selling shares to investors. It then pools that money to buy and sell a wide range of shares and assets. 

When you buy shares in an investment trust, you buy shares in that company. The number of shares issued is limited so they are known as ‘closed ended’. 

Exchange-traded funds, also referred to as ETFs, are investment funds that are traded on a stock exchange, much like equities. ETFs hold assets such as stocks, commodities, bonds, or a basket of assets. 

Most ETFs track an index, such as a stock index, or bond index. ETFs experience price changes throughout the day as they’re bought and sold.