No matter how hard you avoid it, everything in life needs a plan – a goal. Otherwise you’re just kind of swerving from one side to the next like a drunk leaving the bar and not having any idea where to go next.
This holds true, as I’m told over and over again, with financial planning and investing.
What are Financial Plans and Goals for your Investment Strategy?
This is a question you must answer. It doesn’t have to be in full detail, but a good idea so that you can start taking the correct moves to your ultimate goals.
My Financial Planning Goals:
Yes, that’s right. I want to risk and I want to risk big – well almost.
My goals for my portfolio is growth. As I mentioned earlier I don’t believe in financial formulas. To me they are hopeful gadgets that don’t really work well in the real world. It’s all to deceiving to stick in a few numbers and say my goal is to make 12-20% on my investments for the year. If it was that easy, we’d all be doing it.
The challenge is obviously figuring out how to do it well.
So how am I going to be an aggressive investor rather than a buy and hold investor over long periods of time?
Let’s take the sum of the whole and break it down first:
60% will go to the aggressive growth portfolio and 40% more tamed yet still high growth
Aggressive Growth Portfolio broken down:
25% Emerging Markets ETFs
25% Stocks – mainly small cap
15% Dividend stocks with higher yields
10% Penny stocks
The other 40% for growth
25% Dividend stocks – with a lower yield between 4-6%
25% Stocks – large caps
25% Emerging Markets – ETF’s – the more secure markets
25% Commodities – ETF’s – the more secure resources that are definitely on the rise
Yes, the do resemble one another. However, it’s all in the way you do it that counts! Basically, what I’m buying and how long I’m buying them for.
This is my route, I definitely dont’ recommend any one do the same. We each have our own goals – which must be defined. If you’re in the position where you can risk more, than develop a goal that will give you the best returns. If you’re more in the lower risk – slow and safe growth – then that’s what you need to decide and break it down for you.
The main purpose of this article is to show you that you must come up with some sort of a plan to get you started.
You will also see, with time, your plans and goals will change- that’s called being flexible and going with what is necessary at the time. But if you don’t have an initial idea, you won’t be able to head in the right direction.
1. I am not including my cash and easily liquidated funds. I know that many people include this into their portfolio, which I don’t think is a good idea since it’s sooo low risk of gaining anything, it’s just part of my holdings.
2. This is not my Roth IRA account which I plan on having a much more tamed outlook and more diversification such as bonds, emerging markets (I don’t believe these are as risky as many people think they are – for the most part), dividends with lower yields, and stocks (both small and large caps), ETF’s (my absolute favorite for both emerging markets and commodities – another investment that I feel isn’t as high risk as many like to think).
3. I will be doing a totally different portfolio for my Roth IRA.