Bonds and Treasury Bills: A bond or a treasury bill is an instrument used by the issuer to borrow money
from the holder with an obligation to repay the principal and interest on future dates. When you invest in
bonds you lend your money to the issuer of the bond who may be a company or government.
If you invest in bonds, you receive a promised fixed amount of interest on your investment every half-year
or every year. It is an obligation on the issuer of the bond to pay you the interest.
Mutual Funds / Unit Trusts: Mutual funds and unit trusts are financial instruments that allow investors to
pool their money together under the management of a professional fund manager who is responsible for
investing the pooled resources in specific investment opportunities.
Mutual funds and unit trusts are designed principally for small savers; you can start investing in these
schemes with as little money and buy more shares or units on a regular basis with even smaller monthly
payments.
When you invest in a mutual fund or unit trust, you become a part owner of the funds’s assets and share
in the returns from investments made by the fund manager. Your investment may, however, fall in value if
the fund makes a loss.
SALE OF INVESTMENT PRODUCTS
You can sell part or all of your investments in shares, bonds, mutual funds or unit trusts any time you want
to do so. Getting your shares or bonds sold quickly depends on the availability of buyers in the market and
the price that you may want to sell at. For investment in mutual funds or unit trusts, the fund manager stands
ready at all times to buy from the investor.
INVESTMENT AND RISK
Like many of life’s activities, investments are asscociated with risk. Risk is the possibility of losing part or
all of the money invested.
Investment-associated risk is the chance that the invested capital may drop in value which means that your
aim for investing may not be achieved because the investment does not work as one hopes or expects.