Putting a Focus on Goals-Based Investing

Most people have a variety of intentions, or goals, for their savings. They may want it to generate an income, to accumulate to a certain benchmark, to provide for shortfalls in Social Security, to pay for their children’s college education or to provide a legacy to heirs.

But if you invest solely as a means of chasing investment returns, your savings may not hit all the goals you intended it to. That’s why a focus on goals-based investing might be a better option.

What is Goals-Based Investing?
Goals-based investing is a method of breaking up your savings and investing it in many different investment vehicles, each designed to deliver on one of your various goals.

For example, an individual with the goal of accumulation and income may invest some of his or her savings into value stocks and stocks that may potentially pay a dividend. The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. One who is concerned about making their savings last and generating a future, guaranteed retirement income may choose to invest in something that provides a guaranteed income source like a fixed annuity.

Investment Choices Vary—Just Like Goals
Chasing returns is a difficult proposition and sometimes, doing so can actually expose an investor to more risk than he or she is comfortable taking on. But when focusing on goals instead of returns, investors often find a multitude of investment opportunities capable of meeting their goals, which allows them the opportunity to create a more diversified portfolio. This strategy can also result in reduced exposure to market volatility without sacrificing the objectives of the investor.

Satisfaction Achieved
One more benefit to goals-based investing is that it provides a great way to measure the success and efficacy of a portfolio. When an investor is only focused on returns, he or she will likely never feel satisfied with their portfolio’s performance because there will always be some investment out there performing better than theirs. But when your money is invested in delivering specific goals, you have a new way to evaluate the success of the portfolio and this can lead to much greater satisfaction while also helping ensure that goals are realized.

At Kramer Wealth Managers, we want to help you realize your financial goals. Contact us today to see how we can change the focus of your investment strategy and help you find the right investments for your risk tolerance and objectives.

There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment.


Investors should be aware that investing based upon strategies or models does not assure a profit or guarantee against loss.