Achieve your goals

Setting your goals and keeping on top of your investment plan

Identifying your investment goals

Whether you're saving for the long term or short term, keeping an eye on your investment goals is key. You probably already have an aim in mind, perhaps a deposit on a new home or a comfy retirement fund? Either way, it's important to tailor your investments towards achieving your goals.

Ask yourself, "What do I want the investment to be worth at the end of the term?" This will determine how much you need to invest - either as a lump sum, regular payments or a blend of the two. Also consider whether you want growth or income. Are you looking to grow your pot to help fund a holiday or seeking income for your retirement? Again, the trick is to tailor your investment to suit your aims. So let's look at the key factors that affect how you build and manage your investment portfolio.

Your time horizon

When do you need the money? The further away your time horizon, the longer you'll have to ride out any ups and downs in your investment. For example, if you're saving for your retirement in 30 years then you'll have more time to let your investment settle, so you might go for a riskier Fund but potentially with greater returns. However, if your child's off to university in a few years and you want to grow some savings for them, a low-risk investment with a more consistent return could be the sensible choice.

Your attitude to risk

The level of risk you take depends entirely on your appetite for it. It's important to think through how comfortable you are with the possibility of losing money and, most importantly, how much you can afford to lose. High risk investments can fluctuate a lot, the value can go down as well as up and you could get back less than you invest. Low risk investments, on the other hand, tend to fluctuate less but come with lower potential returns.

Take your time horizon into account, and remember that different time horizons work better for different levels of risk.

Then look back at your goals and think about how much risk you're willing to take. What would you choose to invest in? How much time do you have to achieve your goals? Will you be able to stick to your plan? Getting a good idea of your attitude to risk will help you make smarter decisions.

Why not have a go at our goal planning tool - simply enter the investment sum, any regular payments, time horizon, risk level and we will calculate the likelihood of you acheiving it.

Plan a goal

Your liquidity needs

Liquidity means how quickly your investment can be converted into Cash or equivalent. So if you don't have short-term liquidity needs you can probably afford to go in for less liquid investments, such as a Property Fund.

Again, consider your time horizon and risk tolerance. You should also take a good look at your overall situation. If you're fairly comfortable financially, you'll be better equipped to take on a less liquid investment. And remember, it's always a good idea to have sufficient Cash saved in an account that can be accessed easily whenever you need to.

Once you're happy with your plan, you can start matching your goals with specific investments to create a portfolio.

If you're considering starting a Stocks and Shares ISA but you're not sure if it's the right investment for you, speak to a suitably qualified Independent Financial Adviser.

Before investing, always ask yourself:

  • How much money do I want to invest?
  • Will I be investing one lump sum or making regular contributions?
  • How much growth am I hoping for?

Whether you're interested in a long-term investment or building short-term savings, defining your goals and tailoring your investment plan to them is essential.

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