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:

  1. When will you need to access the money (time horizon)?
  2. How much of your current savings can be dedicated to these goals?
  3. How much will you be able to contribute regularly to these goals?
  4. What is your risk tolerance?

  5. 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.