How to Determine Investment Objectives?

What is the objective of financial investment? Well, every woman has different needs and wants, just like they have different objectives for investment. As you can probably guess, determining your investment objectives is the crucial first step when starting your investment journey. In this blog, we’ll discuss how to determine your investment objectives.

What are investment objectives?

Investment objectives, in simple terms, mean defining your financial goals. They vary from woman to woman and they serve as the foundation for any investment decisions made by an individual.

What are some basic investment objectives for women investors?

I want to save taxes!

The aim here is to reduce the overall tax burden of women by investing in instruments that offer tax deductions or exemptions.

I want to have enough money for myself and my family!

This strategy involves building financial security for themselves and their families, helping them build a corpus and enabling women to take charge of their financial futures.

I want to create wealth!

Here, women investors aim to invest in securities with high growth potential to gain higher returns over the long term.

I want to provide the best education to my child!

Women investors with this objective aim to invest in securities that will beat inflation and will provide good returns over the long term. This helps in ensuring a high-quality education for your child, laying the foundation for their future success and fulfillment.

What is the importance of determining your investment objectives?

Provides clarity of goals:

Defining their investment goals allows a woman investor to get clear on what she wants to achieve, when she wants to achieve it and how much risk she is willing to take.

Makes it easier to measure progress:

When you have clarity on your investment goals, you can measure how well your investments are working for you and how far you are from achieving your goals.

Enhances your motivation to invest:

Defining your financial goals gives you the motivation and discipline to keep investing consistently until you reach your set goal. Investing through SIP in mutual funds can make this process easier by investing a fixed amount in periodical intervals.

How to determine your investment objective?

In order to determine her investment objective, a woman needs to set SMART Goals! 

These are:

1. Specific –  What do you want to achieve?
2. Measurable – How much money do you want to invest?
3. Achievable – How much risk are you capable of taking?
4. Relevant – Is your goal realistic?

Time-Bound – By when do you want to achieve your goal?

For example – Sheena’s investment goal is to plan for her retirement. To achieve this, she wants to invest Rs. 15,000 monthly for 30 years. Her risk tolerance is high and this goal is important and relevant for her as she wants to have a comfortable early retirement.

How to plan for objective based investing?

Planning for your goals depends on the duration within which you want to achieve your goals. Which is known as objective based investing.

Pro-Tip: Make use of a Goal Calculator! Simply input your goal amount, expected return and time horizon and easily arrive at the required SIP/Lump sum investment you need to start making to achieve your investment goal.

Explore Lxme’s Goal Calculator and take the first step towards reaching your goals!

If you want to achieve your goal within a year, then it’s categorized as an Ultra-Short Term Goal (Some such goals are emergency fund, birthday, anniversary celebration or paying off small credit card debt) – 

Invest in mutual funds which offer a high degree of liquidity and also generate a reasonable return.

Check out Lxme’s Gulluck and Ultra Short Term Plan and begin investing for your shorter term goals today!

If you want to achieve your goal within 1-3 years, then it’s categorized as a Short Term Goal (Some such goals are buying a car, saving for a down payment on a home or luxury shopping)

nvest in debt mutual funds, gold mutual funds or funds which are a mix of debt and equity to maintain an optimal balance of safety and liquidity.

Check out Lxme’s Short Term Plan and Rs. 100 Debt Fund!

• If you want to achieve your goal in 3+ years, then it’s categorized as a Long Term Goal (Some such goals are planning for retirement, buying a house or planning for an international trip)

When your goal is for the long term, you can invest in equity funds or funds that are a mix of equity and debt as these funds aim to achieve capital appreciation over time. Certain long-term goals like retirement or child education need to be planned for in advance, make use of Lxme’s Retirement and Child Education calculators to understand how much you need to invest for these essential goals. 

Check out Lxme’s Long term Plan, Rs. 100 Equity Fund or Boost Fund to meet all your long-term goals! 

To sum up, defining your investment objectives is a critical step in a woman’s financial journey. It sets the foundation for all coming investment decisions and helps women navigate personal financial planning with confidence. If you want to learn investing then come on the Lxme app.

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