Anchor your Mutual Fund Investments!
- Jayesh Gala
- Sep 19, 2017
- 2 min read
Goals described in terms of the money required to meet it at a point of time in future, is called a Financial Goal. It specifies the sum of money required in order to meet the needs and when it is required. Identifying financial goals help put in place a spending pattern and saving plan so that current and future demands on income are met efficiently. For example - I wish to accumulate 20 lakhs by 2025 to fund down payment of purchase of house is SMART Financial Goal. I want to save money for down payment of house is not!
Planning for Financial Goals looks into Goal Value (inflation adjusted), Time Horizon and ways to Fund the Goal. Investors financial ability to take risk and willingness to take risk also needs to be taken into account. Then comes Portfolio construction followed by periodic review and re-balancing.
While Saving is good, attaching a Goal to Investing would Anchor it for Good!
For Example Mr A's Investment in Mutual Fund of Rs 3 Lacs has grown to 6 Lacs in 2 Years. He has got handsome returns but has no financial goals attached. Mr A sees his neighbor driving a luxurious sedan and gets tempted to buy one for self even though the current hatchback is just a year old and in good condition! Mr A ends up withdrawing from the Mutual Fund Investment to make the car’s down payment! Such emotional decision are more common where investments are not attached to Financial Goals.
Identify your 1, 3, 5, 10 years financial goals and prioritize them. Financial Goals can be :-
Emergency Fund
World Tour
Buying House
Marriage
Kids Higher Education
Kids Marriage
Passive Income
Retirement Corpus
Start your Mutual Funds Investments and Anchor them to Financial Goals and you are well on your path to achieve them!
If you interested in Investing in Equity Markets via Mutual Funds we can assist and guide your Investments, get in touch with us.
Disclaimer :- All investments are subject to the financial and market risk. Investors should re-assess information provided herein before investing. Mutual Funds are subject to market risk. Past performance may not be sustained in future.
