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2 mins Read | 5 Years Ago

Advantages of Investment for your Goals


Investing without goals is like taking a trip without knowing the destination. Very often, beginner investors (and even seasoned pros) make the mistake of picking an investment product based solely on its market performance. The result? They are left with an unplanned and unstructured portfolio that fails to meet their specific financial requirements.

Setting clear goals like buying a home, saving for retirement, funding for college and more should play a key role in helping you choose the right investment plans.

Here’s how goal-based investing helps you make successful investments:

1. The Power of Returns : You move from Saving to Investing

One of the best ways to invest is to reap the benefits of compound returns. If you want to achieve your long-term goals, move from saving money in a Savings Account to investing money the right way. This is where compound returns come into the picture. By starting your investments early, you not only enjoy higher returns but also beat inflation.

2. Your Goals become Achievable

By having the right investment plan in place, you get a clear idea of what you need and how to get there. Investment goals quantify the funds you need to achieve individual financial goals, while specifying the time limit for each goal. It breaks your targets down into micro goals. So you inculcate the habit of saving regularly to make your financial goals come true.

3. You don’t Undershoot your Target

Most people don’t have a realistic idea of how much money they need for a specific goal like retirement. Since retirement seems far away, they don’t start early and miss out on the benefits of compound returns. With investment goals and objectives, you discover how much you need for all your long-term goals and figure out the actual amount and time limit to meet your goals.

4. You Optimise your Risks

Different goals require investments which come with varying degrees of risk. For instance, you cannot choose high-risk investment options for funding your child’s higher education.

By setting up investment goals, you invest your money in the right products with an appropriate risk portfolio for each of your financial goals.

5. You Achieve Better Returns

Goal-based wealth management is the best way to invest money because it matches your time horizon with asset allocation. This means, you avoid misallocating (saving too much or too little) and take the optimum amount of risk, thereby helping you achieve optimal returns.

Final Thoughts

When you plan a trip, you always have a particular destination in mind. The same applies to your investments. By taking a goal-based approach to investing, you improve the chances of what you wish to achieve — whether taking your family on an overseas vacation, buying your dream home or planning a comfortable retirement.



The contents of this document are meant merely for information purposes. The information contained herein is subject to updation, completion, revision, verification and amendment and the same may change materially. The information provided herein is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person‘s nationality, residence or otherwise) be contrary to law or regulation or would subject lClCl Bank or its affiliates to any licensing or registration requirements. This document is not an offer, invitation or solicitation of any kind to buy or sell any security and is not intended to create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. Please obtain professional legal, tax and other investment advice before making any investment. Any investment decisions that may be made by you shall be at your sole discretion, independent analysis and at your own evaluation of the risks involved. The use of any information set out in this document is entirely at the recipient's own risk. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith by lClCl Bank and from sources deemed reliable. There can be no assurance that such projections will prove to be accurate. lClCl Bank does not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith and sources considered reliable by lClCl Bank. In preparing this document we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us or which was otherwise reviewed by us. Past performance cannot be a guide to future performance. 'lClCl ' and the 'I-man' logo are the trademarks and property of lCICl Bank. Misuse of any intellectual property, or any other content displayed herein is strictly prohibited.

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