How to Set Your Investment Goals

Investment goals revolve around your personality, your resources, and how much money you want to make.  Defining your investment goals requires more than just saying I want to make money in the stock market.

Failure to define your goals will result in failing to achieve the profits you deserve and secretly want.  Sometimes we are afraid to voice or write down what it is we really want, yet not doing so actually sets us up for mediocre results.

Keys to Success-2

The keys to achieving the best investment results come from knowing what you are aiming for and what financial resources you bring to the investing table.

In general, the keys of how to set your investment goals revolve around:

  • Personality
  • Time
  • Current Financial Resources
  • Future Financial Resources
  • Profit Use

Personality: Be honest and ask yourself, your partner, or close friends if necessary these questions: Are you a risk taker?   If yes, how much financial risk are you willing to take? Are you willing to lose money in order to make money?

The point is you need to figure out if you are the kind of person that you would call for a squeeze bunt play if you were managing a baseball team? Or would you take a friend and go for a carefree all day hike in the back country of Glacier National Park? In other words, are you more likely to be a conservative investor or an aggressive investor, or does your personality fall somewhere in between the two?

Time: Are work, family, sports, and hobbies chewing up most of your time? Can you find 30 minutes a day? or 30 minutes to an hour a week to manage your investments? Would you rather be fishing, out on a date, watching a movie or TV or making investment decisions?

An aggressive investor will have time almost every day to make investment decisions.  A conservative investor on the other hand, will usually spend just 30 minutes every other week or two reviewing his portfolio.  If you are a moderate investor-falling somewhere in the middle- you’ll probably only spend about 30 minutes a week with your investments.

Current Financial Resources: How you diversify your investment portfolio is influenced by your personality and the time you have to make decisions but if you have minimal resources, aggressive goals may need to be handled carefully so that you don’t endanger your cash and future growth.   This doesn’t mean that you have to take a totally conservative investment stance, but you may need to find some balance between conservative and aggressive investing or establish multiple financial goals.

Future Financial Resources: Building your investment portfolio with additional cash each week or each month will allow you to pursue more moderate or aggressive goals because your investment base is always growing.

Profit Use: How you plan on using your investment profits is an important consideration. How quickly you want to reach a certain cash level can push you towards either conservative, an aggressive, or a middle-of-the-road approach to making your investing decisions.

Reviewing your honest answers to these five considerations for developing your investment goals should help you focus on the investment method that works best for you.

Dominick is the designer of the investment program Dynamic Investor Pro, an investment software used by individual investors and professional investment advisors for stocks, ETFs or mutual funds.


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