Business Mirror Investing With A Goal

Many individuals who are familiar with various investment products are quick to propose their favorite investment vehicles based either on their personal investing experience or the products they are marketing. This means you need to establish an investment goal before you start thinking about your investment options. Having a clearly defined investment goal will allow you to choose the right investment instrument. Now, there are goals, then there are “smart” goals. Investing to grow your money is not really a good & useful goal. For an investment goal to be “smart” it should be specific, measurable, attainable, realistic and time-bounded.



For an investment goal to be useful you should attach a specific monetary value to it. If you are investing to fund your child’s college education for instance, determine the exact (or projected) amount of funds you need to accumulate. Finally, a goal is not a goal unless you put it within a specific time frame. Investing to be rich is not a smart goal. Investing to accumulate P10 million isn’t much better either.

It is recommended that you establish milestones for big investment goals. (You may set an annual target if you wish.) After you have set your smart investment goals you need to determine your appetite for risk before you can finally select the appropriate investment vehicles. Risk associated with investment products can be classified generally into low risk, moderate risk and high risk. Although returns for low risk investments, like time deposits or TDs, are relatively low, these are guaranteed and your capital is preserved.