Setting Investment Goals That Help With Your Portfolio Success

Why do you invest? Investment goals are personal, but no matter what you are trying to achieve, it is critical to take an objective look ahead. It is a lot harder to accomplish goals when you lack foresight, so now is the time to formulate your financial objectives.

What Are Investment Goals?

They take various forms, but they ought to be more concrete than generic notions. For instance, even if you wanted your investment in stocks to generate profit, you would benefit from addressing more specific questions, such as how much of a return you wanted to see and how long you wanted to sustain it for. Other important goals for investing might include

  • Generating income that you can use to supplant your working lifestyle,
  • Preserving capital, or making safe decisions that maintain your net worth,
  • Maintaining liquidity, or ensuring that you can always move your money around and have access to it,
  • Achieving alpha, or increasing the amount of active return your investment or portfolio generates compared to a standard benchmark, such as a market index,
  • Minimizing outlay, or the amount of money you have to spend to buy into investment opportunities, and
  • Speculating, or making fast profits to build wealth without being overly concerned about incurring losses.

While it is tempting to come up with broad goals, specificity has its advantages. Instead of merely telling yourself that you want to achieve financial stability or to put your kids through college, translate these objectives into number-based terms to maintain a more realistic perspective.

Why bother with investing goals?

According to the triennial Federal Survey of Consumer Finances, household incomes increased from 2013 to 2016. At the end of that period, around 51 percent of families held stock, which indicates that more people are investing their money.

Whether you are among the most recent wave of market participants or a veteran at planning financial goals, setting investment goals is just as important as setting savings goals. Money does not manage itself, so it is crucial to build a system that keeps your portfolio on track and lets you check in as often as you like.

Learn how to set investment goals

Defining Your Investment Goals and Objectives

How can you choose investment goals that suit your needs? It is easier to get started when you put yourself in the right frame of mind. In other words, you need to be more proactive about the financial factors that dominate your life.

Practice Setting Goals for Investing

Big objectives like retiring can be overwhelming. Make things less of a hurdle by forming your investment goals in parts:

  • Pick short-term investment goals based on your current consumer habits. For instance, you might want to upgrade your old furniture, make a home improvement or gradually divert some income toward a vehicle down payment.
  • Choose long-term goals for investing with an eye on your ideal future. This is where you think about saving to fund a comfortable retirement, your children’s college fund, or buy a new home.

Do not worry if your investment portfolio goals seem contradictory at first. Effective financial planning typically involves diversified portfolio strategies that let you achieve multiple ends. In other words, not every stock, bond, retirement plan or mutual fund that you buy into needs to do precisely the same thing.

What are investment objectives?

What do financial planning experts mean when they talk about setting investment goals? Most define investment objectives in terms of concrete fiscal needs and benchmarks.

Brokers and robo-advisers alike base their portfolio actions, trade advice and hot tips on the impacts that specific investment plans will likely have on your bottom line. Whether they are selecting asset types to bulk up your portfolio or just trying to help your money’s growth keep up with inflation, experts express goals as numerical quantities that they can readily:

  • Track,
  • Compare, and
  • Use to inform decision-making strategies.
Investment Goals by age

Picking Goals for Investing

Choosing appropriate goals for investing can seem overwhelming when you are just getting started. Although each investor deserves the tools and freedom to follow their own path, there is nothing wrong with learning by example. Here are some common investment goals by age:

Investment Goals in Your 20s

This is the time to start saving for the unexpected, so create an emergency fund. You should also try to eliminate or resolve your debts since they take away from income you could be investing. It is encouraged to be aggressive now while you have less to lose.

Investment Goals In Your 30s

Budget carefully. Stick to your plan as you chip away at debts and prioritize retirement savings. When using savings vehicles like Roth IRAs and 401(k)s, contribute the maximum allowed amounts to make the most of the tax benefits.

Practice exercising your willpower by doing away with unnecessary expenses. Invest as much of your post-tax income as possible.

Investment Goals In Your 40s

Keep eliminating debt. Most people start saving for homes and their kids’ college funds if they have not already.

Investment Goals In Your 50s

At this point, you qualify to be eligible to make catch-up contributions to retirement plans. When it comes to other portfolio assets, such as stock investments, focus on the long term. This is also a wise time to invest in your Roth plans.

Investment Goals In Your 60s

Retirement planning should be among your primary goals for investing. You are close to the finish line, so plan more conservatively to sustain your wealth.

Shift your portfolio allocation gradually toward more stable investments. Estate planning questions can be tough to answer, but there is no better time to ask yourself how you want to handle your estate’s disposition, life or disability insurance, and potential long-term care needs. Since your investment plan can power all of these retirement goals, it is critical to devise a strategy with the necessary staying power.

Investment goals and risk tolerance

Understanding Risk Tolerance for Investing

Your risk tolerance is a measure of how much volatility or variability you are willing to accept from your returns. It informs whether you pursue goals for your investments in an aggressive, moderate or conservative fashion.


Aggressive investors rely on their understanding of different asset classes to make money from high-volatility securities. While they are concerned with risk, they do not let it stand in the way of their desire for maximum returns.


As a moderate investor, you will try to take an even-handed approach and concentrate on mid-range goals. Your focus is on what might happen five to ten years down the line. One common tactic for keeping things balanced is to split your portfolio and put half into stable funds.


Conservative investors have typically had their fill of risk. For instance, you may have built a nest egg after a few decades of retirement planning and merely want to sustain it so that you can enjoy it. To this end, you might favor bonds, money markets and similar capital-preserving assets.

Capital Needs and Building a Portfolio to Match Your Goals for Investing

Investing takes money. There are multiple ways to get it. For instance, you can divert cash flows, such as your income or insurance benefits, to an investment portfolio instead of a savings account. Alternatively, some investors borrow money on their portfolios and use debt to fund their activities.

One way to ensure that your investment plan satisfies your savings goals or other objectives is to choose investment vehicles that fit the bill:


These retirement planning vehicles let you build a nest egg by putting away money and having your employer match your contribution. You can also defer your taxes until you withdraw the money.

Individual Retirement Arrangements

IRA retirement accounts are self-guided. You put the money in before or after taxes, so you can benefit from tax-free or tax-deferred withdrawals. These tools are popular because you are able to choose your investments, open up multiple IRAs and transfer, or roll over, assets from one IRA into another.


Stocks are securities tied to the performance or earnings of a company. In addition to being able to transact stock units, or shares, to your gain, you can receive dividends from the company’s profits. Unlike retirement planning vehicles, stocks let you play with your money more freely, but they can also be included in retirement portfolios.


What does it mean to diversify? Diversification is the act of including different kinds of asset classes in a portfolio.

You only have so much capital to fund your investment plan. By diversifying, you buy into a range of assets to accomplish your investment goals without running the risk of losing everything in an upset.

How to Set up a Portfolio

Not all portfolio creation methods are the same, and your choice might determine how easily you can achieve your investment goals:

Starting a Brokerage Account

Brokerages are the traditional investment plan management option. While they cannot set your investment portfolio goals or teach you to be better at financial planning, they do a lot of the work for you.

However, brokerages will not magically make you rich or solve your retirement planning problems. They can easily saddle you with fees or expose you to gimmicks or fraud.

Achieving Investment Goals Through Automation

Robo-adviser online services improve on brokerages by giving you more authority. Since you do not have to pay to access your accounts or make changes to your investment plan, you can dive in and adjust when you want. You can even program software tools to target specific objectives of your investment activities.

Why is this better than brokerages? Whether you are picking investment goals by age or according to your lifelong retirement goals and dreams, an automatic investment plan keeps you in control. Although some people might like the hands-off approach, those whose investment goals impact their well-being often prefer AI-powered systems that let them become their own financial advisers.

Investment goals are easy with M1

Monitor and Revise Your Goals for Investing

Life evolves, and your investment goals are no exception. Choose portfolio tools that let you monitor and revise your investment goals by age, whenever you experience significant life changes and after the unexpected.

When should you take stock and adjust your goals for investing? Events like marriages, divorces, births, deaths, adoptions and other milestones with legal consequences are usually good indicators that it is time to refocus. It is also wise to reassess your goals for investing before spending big on major purchases or taking on debts. At a bare minimum, you need to be checking back in at least annually.

See Your Investment Goals Through

How can you make sense of all the data to accomplish your investment goals? Start by changing the way you manage your portfolio.

M1 Finance gives you more power to set smart goals for investing. The platform leverages intuitive visual charts and customizable accounts to portray your assets in more certain terms and is commission and fee free. It is in this way that you can  invest the way you prefer.

M1 is all about using innovative software to help you meet your goals for your investments. With an accessible system that puts your portfolio data within reach wherever you bring your phone, M1 is revolutionizing how people invest. Want to learn how to set financial goals? Feel like you could be doing more with your retirement planning? Choose the robo-adviser that lets you achieve your investment goals confidently. Sign up for M1 Finance today.