A Guide to Goal-Based Investing: Meeting Your Financial Objectives

As your needs change, you should have a plan that provides you with varying levels of protection and

As your needs change, you should have a plan that provides you with varying levels of protection and comprehensive coverage.

Maintaining financial stability and security requires having financial goals and investing appropriately in order to achieve them over the long term. A lack of a clear financial plan can make it difficult for you to reach important milestones, such as purchasing a home, sending your children to college, or retiring comfortably. Setting clear goals and investing appropriately can assist individuals in achieving these milestones and securing their financial futures. By making smart investment decisions today, you can ensure that you are able to reach your goals tomorrow and live the life you want.

In goal-based investing, you identify your financial goals and plan your investments accordingly. You can use it to prioritize your investments and create a roadmap for achieving your goals. Your investment strategy will be determined by your time horizon and the financial objectives you wish to achieve. Individuals who wish to save for specific financial objectives, such as retirement, education, home ownership, or portfolio development, can benefit from goal-based investing.

A person should have short-, medium-, and long-term financial goals. Short-term goals can be achieved in a year, while medium-term goals take one to five years. Long-term goals take more than five years to achieve. Each goal requires a unique investment strategy.

●       Investments for short-term goals are usually low-risk. The objective is to preserve capital while earning a reasonable return. Investment options for short-term savings include high-yield savings accounts, certificates of deposit, and money market funds.

●       Investing for medium-term goals requires a more balanced approach . The objective is to earn a higher return than short-term investments while preserving your capital as well. Medium-term investment options include balanced mutual funds, municipal bonds, and fixed annuities.

●    Long-term investment options include individual stocks, growth mutual funds, and real estate. A long term investment strategy helps you shore up and grow your savings for long term goals like children’s education, a dream home and your retirement corpus. Long term strategy must include both high risk and also low risk investments, to aim for a more balanced portfolio.  This will ensure that your wealth grows steadily, even as your savings stay protected.