The traditional approach to investing has focused on investment returns. While investment returns are certainly important, this approach often means investment objectives aren’t clear, investment decisions can be ad-hoc and impulsive, and the level of risk doesn’t align with personal goals.
An alternative approach to this is known as goals-based investing. Goals-based investing is an investment approach which focuses on achieving specific financial goals, such as saving for retirement, a child’s education or buying a family home. This approach involves setting a specific investment objective, determining a time horizon, and developing an investment strategy with an appropriate level of risk that to meet that specific goal.
Rather than focusing on maximizing returns or beating a benchmark, goals-based investing prioritizes achieving a specific outcome. The portfolio is constructed to meet the individual’s specific risk and return needs, based on their important goals and time horizon.
This approach can help investors stay focused on their long-term objectives, avoid making reactive investment decisions, and maintain a disciplined investment strategy that aligns with their individual needs. This doesn’t mean it is set and forget though, and it is important to regularly review and adjust the investment strategy as goals and circumstances will change over time.
Want to learn more?
To organise an obligation free conversation, reach out to us at info@horizonwa.com.au or book in an initial consultation here: Book a Meeting.
The above contains general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs. You should, before you make any decision regarding any information or strategies mentioned, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.