Strategic Insights | Investing with a goal in mind

Strategic Insights | Investing with a goal in mind

Financial Planning
Published September 10, 2021

Why do you want to invest in the first place?

Probably because it looks as though low interest rates are here to stay. And possibly because you want to do everything you can to ensure that your money is working for you.
But before you start investing, it’s worth spending some time asking yourself about the specifics. What are your goals? Knowing what they are will help you plan, budget… and even help us choose the right investment vehicles for you. Maybe you might want to enhance your current lifestyle, plan a future for your family or prepare for your own retirement. Or you maybe want to start your own business, support other business owners or be part of a new venture.

There’s no time like the present

It may seem obvious, but it cannot be overstated: the earlier you start investing, the better. Part of the process involves balancing your long-term investment goals with your short-term lifestyle aspirations. You don’t want to make so many sacrifices now that your life will simply become unbearable!
Once you know what your goals are and what kind of time horizons you are dealing with, you can start defining your budget. Be realistic about what you can afford to put aside every month for your investments. To help you put together a budget and then stick to it, we can use cash flow modelling – leveraging all the capabilities of cutting-edge financial planning software. It’s also well worth taking time to consider what you really want your investments to do for you. Essentially, this is an exercise in knowing yourself, knowing what your needs and goals are and understanding what your appetite for risk is.
Here are a few things to think about before you start investing.


You need to have a clear idea in your mind about what you are investing for. Traditionally, investing is usually more appropriate for medium- and long-term goals (at least five years). If you think there is a chance that you might need to access your money before that, saving – rather than investing – might be a better bet.


Before you can even think about investing, you need to make sure that you have enough money to cover your basic living costs – as well as any debts you might have (including your mortgage). You should also have money stored away in a low-risk, easy-access pot for any metaphorical leaky roofs, dysfunctional boilers or trips to the dentist.

Investment risk

Have a think about your relationship with risk. How do you feel about it? How comfortable are you “risking” your money? Do you see risk as part and parcel of the investment process, or is it something that you think you should avoid at all costs? This relationship will determine how aggressively or conservatively you invest your money. It is also wise to consider any other financial commitments that you have – such as dependents still living at home or who are intending to go to university, or elderly parents who may end up needing paid-for care. Again, if you are not prepared to take any risk with your money or if you are simply unable to do so, then investing might not be the best option for you at this precise moment.


If you’re an experienced investor, you’ve doubtless come across the Wall Street adage: “it’s time in the markets, not timing the markets that matters”, meaning that it is often more beneficial to stay invested for many years, rather than worrying about whether now, next week or yesterday is (or might have been) the best time to invest or to withdraw from the market.
During periods of stock market volatility, it’s human nature to get anxious. In previous Strategic Insights articles, we have looked at ‘loss aversion’ and how the human psyche behaves during market falls.
To try and avoid stock market dips, some investors try and ‘time’ the market – the aim being to buy when prices are at their lowest and to sell when prices reach their peak.
This can obviously be incredibly lucrative if you get it right. But the most important word in that sentence is ‘if’. Not even the most famed investors or star fund managers can get it right every time and getting it wrong means locking in losses and missing out on gains.
Take the example of March 2021 when horrified observers watched the S&P 500 lose 30% of its value while markets all over the world started to bottom out. Had you withdrawn from the market then, you’d have missed out on the Lazarus-like recovery which got under way in the week before Easter.
So put simply, the longer your money is invested, the more opportunity it has to grow in value. And if it is invested in any high-risk funds, then the more time you will have to ride out any market volatility. Oh – and don’t forget what a wonderful thing compounding is. Not only will the money you invest grow in value – you will also get growth on any previous growth. The longer the period of time during which you are invested, the more significant the difference this will make to the value of your investments.

What you’ll get back

At the risk of stating the obvious, the final value of your investments will be determined by three main factors: how much you pay in, how your investments perform, and how long you remain invested for. As a general rule, the more you pay in, the better your money will perform. And the longer you can keep your money invested, the more you’re likely to get back at the end.

A diversified portfolio

It makes sense to spread your money across different types of investment and even different countries. Doing so will reduce the levels of risk to which your money is exposed. The last 18 months have demonstrated that different investments are affected by different factors – everything ranging from economics, interest rates, geopolitics and conflicts… to meteorological events and pandemics. What benefits one investment may not be so good for another, meaning that when one rises, another may fall.

Be tax-efficient

There are numerous tax efficiencies that you can use for investing – such as your pension or your Individual Savings Account (ISA) allowance. A meeting with Nick Rolf, Investment Quorum’s Director of Private Clients, can bring you up to speed on tax planning, estate and trust planning, pensions and a whole host of other considerations that will protect you and your money from the taxman.

Check in with us

A robust investment plan is underpinned by a clear roadmap and a sound understanding of your goals, together with any limitations or constraints that you may have. Most objectives are long-term, and your plan needs to be designed to be able to withstand changing market environments, adjusting to unforeseen events along the way.
Phone us, email us, Zoom with us… or pop in and see us. Just make sure you talk to us. Together, we should conduct regular reviews of your investments to make sure that they are on track to help you meet your goals.