Setting investment goals and timescales
If you don’t know where you want to go, you’ll find it tricky getting there! Don’t worry if your investment goals are a little vague — it’s good to have some flexibility.
Reasons why people invest
Here are a few examples of why people invest in the stock market:
- Build wealth for financial freedom
- Pay for a child’s university fees
- Provide an income in retirement (pension)
- Speculate on the markets
Setting your timescales
Identify whether your investment goals are short-term, medium-term or long-term. Your life stage is an important consideration here, and your investment strategy will need to take this into account.
How much will you need?
Try to put a figure on how much money you will need to achieve an investment goal. This will help form your investment strategy, for example, if you want to achieve a high return in a relatively short space of time, you might need to opt for investments which could give you higher returns, albeit with more risk to your capital.