Goals-based Investment Planning

Goals-based Investment Planning

Goals-based Investment Planning 1200 900 Integral Private Wealth


The foundation of goals-based investing lies in ensuring that there is alignment between your financial goals and objectives, tolerance for risk and the way your investment portfolio is ultimately invested. We explore this in a little more detail.

Goals-based investing (sometimes referred to as objectives-based investing) is a method of allocating investment assets that target a certain investment return to achieve a certain outcome, e.g. retirement or a house purchase. Rather than just attempting to achieve the highest possible return for a given level of risk.

Goals-based investing still involves you determining your risk tolerance; however, the focus also lies in you articulating your specific financial goals and objectives. Then working with your financial adviser to construct an investment portfolio in a manner most likely to achieve those goals and objectives.

Why is goals-based investing an important consideration?

Achieving investment returns is important, however when you have a direct link between the investment return you require to fund the financial goal you have, it makes the desired return more meaningful. You may not have to invest in a more aggressive way than what is needed to achieve your goals. In saying that, goals can change over time, as can personal circumstances and investment markets.

Goals-based investing enables you to clearly see how you are tracking towards your goals. With each review with your financial adviser, you are able to understand and gauge the performance of your investment portfolio in relation to your goals.

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