You can narrow down the choice from the hundreds of investments to choose from by being clear about why and how you are investing.

What do you want from your investment?

Are you looking for regular income or are you putting money away for a longer term investment (capital gains) - or a combination of the two? There are different investments available to provide one or the other, as well as some designed to provide a combination of the two.

How much risk do you want to take?

The level of risk you are prepared to accept depends on how long you can tie up your money. If you have got time on your side, you will have the advantage of being able to invest over the longer term (which usually attracts a greater return even from basic interest payments), or be able to increase the risk taken in exchange for the potential of higher returns.

Will you make regular payments or invest a lump sum?

You can invest directly in an investment such as a mutual fund using a lump sum investment, although many funds will allow you to make smaller, more regular payments.

Do you want to invest in a particular sector?

A large number of investment funds and trusts only invest in a specific sector, such as IT. This allows you to pick particular sectors or types of company to invest in.