Any Investment we made must some objectives.Objectives only make man to lead their life higher in socially & financially.Man without clear objectives does not aim high.So,Objectives set by every person in their life,but it differs from person to person.Objectives for Investment likely to be needed,An Investment without Objective will be a Meaningless/directionless.Investment objectives play a major role in determining how conservative or aggressive the investor is in making the investment decisions. Having adequate savings and insurance to cover any emergencies that arise, there are certain objectives/goals for an investment that an investor is to be aware of. Goals can be classified into various types based on the way investors approach them. Investment goals vary from individual to individual and at different stages of life for the same individual. The most frequent investment objectives are –Improving/Addition current income, saving for Essential expenses,Retirement planning and Tax Planning
Improving/Addition to Current Income: The idea behind this objective is to invest into those investments that enhance the current income. Investors need additional income due to various reasons such as improving their educational qualification, meeting costly medical expenses of family members etc. They generally tend to invest their funds in safe and liquid investments to achieve these goals.
Needed/Essential Expenditures: Investors want to save for some major expenditure such as down payment for purchasing a home, planning for higher education of a child, planning to set up a charitable institution after retirement, or achieving financial independence a certain number of years down the line. The goals being long-term and cannot be jeopardized with any other goals, the investors prefer to choose investments that are less risky. It is also common to hold a reasonably diversified portfolio.
Retirement Planning: Apart from the above-mentioned objectives, the most important reason for investing is to accumulate funds for retirement. Though the retirement age is a very small period, still planning accurately to meet those needs is very important. Though
Tax Planning: Another objective of investment is to avoid paying taxes. Tax
treatment for all sources of incomes is not the same. If one tries to avoid paying taxes,
Improving/Addition to Current Income: The idea behind this objective is to invest into those investments that enhance the current income. Investors need additional income due to various reasons such as improving their educational qualification, meeting costly medical expenses of family members etc. They generally tend to invest their funds in safe and liquid investments to achieve these goals.
Needed/Essential Expenditures: Investors want to save for some major expenditure such as down payment for purchasing a home, planning for higher education of a child, planning to set up a charitable institution after retirement, or achieving financial independence a certain number of years down the line. The goals being long-term and cannot be jeopardized with any other goals, the investors prefer to choose investments that are less risky. It is also common to hold a reasonably diversified portfolio.
Retirement Planning: Apart from the above-mentioned objectives, the most important reason for investing is to accumulate funds for retirement. Though the retirement age is a very small period, still planning accurately to meet those needs is very important. Though
employees rely on employers and social security for retirement needs, they have to
supplement it with personal investing. The earlier one invests with the objective of
meeting retirement needs, the greater the opportunity to accumulate the needs.
Tax Planning: Another objective of investment is to avoid paying taxes. Tax
treatment for all sources of incomes is not the same. If one tries to avoid paying taxes,
more funds would be available for reinvestment during the period.
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