Think About Your Investment Goals Before You Invest

The first step before you embark on any investment activities is the setting of investment goals. You may find it difficult to harmonize your goals since some of them may conflict each other or may not coincide with your way of life.

When it comes to investing, many first time investors want to jump right in with both feet. Unfortunately, very few of those investors are successful. Investing in anything requires some degree of skill. It is important to remember that few investments are a sure thing - there is the risk of losing your money!

Pat Swanson, a Certified Financial Planner and families’ specialist with Iowa State University (ISU), states that “Individuals spend more time planning a summer vacation than they do setting investment goals”.

Before you jump right in, it is better to not only find out more about investing and how it all works, but also to determine what your goals are. What do you hope to achieve with your investments? Will you be funding a college education? Buying a home? Retiring? Before you invest a single penny, really think about what you hope to achieve with that investment. Knowing what your goal is will help you make smarter investment decisions along the way!

If you focus on your dreams, establish specific investment goals then you are more likely to be successful.

Too often, people invest money with dreams of becoming rich overnight. This is possible - but it is also rare. It is usually a very bad idea to start investing with hopes of becoming rich overnight. It is safer to invest your money in such a way that it will grow slowly over time, and be used for retirement or a child’s education. However, if your investment goal is to get rich quick, you should learn as much about high-yield, short term investing as you possibly can before you invest.

You should write down your goals. Putting them on paper reminds you of their significance and can motivate you to do what you need to do to achieve them.

Most individuals have more than one investment goal. Try not to have many competing goals that you become discouraged. Also, divide them into short-, medium- or long-term goals.

You should strongly consider talking to a financial planner before making any investments. Your financial planner can help you determine what type of investing you must do to reach the financial goals that you have set. He or she can give you realistic information as to what kind of returns you can expect and how long it will take to reach your specific goals.

Again, remember that investing requires more than calling a broker and telling them that you want to buy stocks or bonds. It takes a certain amount of research and knowledge about the market if you hope to invest successfully.

Your Investment goals should be Specific, Measurable, Attainable, Reviewed and Time-related. That is it should be “SMART”.

A specific goal is one with dollar amounts and dates established for an identified purpose. Decide on a regular amount to invest weekly, biweekly or monthly to accomplish your goals. Be realistic and establish attainable investment goals given your financial situation. Review your goals regularly, for example, annually, to see if you are on target or whether revisions need to be made in your investment plan

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