Managing your investments
How to manage investments to suit your financial goals
Now that you have familiarised yourself with the basics of investing, you might find that mutual funds have a role to play in your investment plan. Before you identify a fund manager that provides the choice of funds and investment expertise you need, it’s important to list out your personal financial goals.
You may have medium-term goal like buying a car, and/or longer-term goals such as purchasing a home, sending your child to university and retirement. In order to achieve these goals, first ask yourself a few basic questions:
- When will you need to access the money (time horizon)?
- How much of your current savings can be dedicated to these goals?
- How much will you be able to contribute regularly to these goals?
- What is your risk tolerance?
After you have answered these questions and determined your investment strategy, reviewing your asset allocation from time to time will be a prudent move. Depending on your time horizon, you may want to modify the risk-return profile of your investments. For example, when you are nearing your financial goals, you may want to hold more of your money in low-risk options.
The above is only a rough financial planning outline. You should consult your financial advisor for a more comprehensive planning framework.