Investment options for our savings are available in abundant, choosing the right one based on the investor’s objectives is crucial to minimize risks. You can choose to discuss with your financial advisor to choose and work on an investment strategy. While one can have more than one objective, it is wise to plan an investment strategy based on the below criteria’s.

Setting investment goals

  • It is crucial to build an investment portfolio that suits your investment goal. Most common investment goals are as follows.
  • Creating an opportunity for additional income
  • Making savings
  • Reduce tax liability
  • Making an additional income source
  • Future needs like child’s education, buying a house etc.,


Ensuring the preservation of capital is the first goal for an investor. Securities such as corporate bonds and government securities provide security and good returns. Treasury bills, banker’s acceptance slips and Certificates of Deposit are also safe investment options.


Capital growth is achieved through the sale of securities at a higher price than the purchase price. Sold at a lesser price is called Capital Loss. Investors seeking capital gain look for long term growth and invest in stocks, real estate, private equities etc. Investors who want to preserve capital would still like to get returns. Choosing a portfolio that yields good returns still have great risk.

Understanding risks involved

Most type of investments involves some amount of risk and sometimes even loss of capital. Usually, higher the risk potential – higher is the income or loss. Based on the investors risk tolerance, the type of investment can be chosen. Risk can be losing investment goals or losing the savings. Risk tolerance, age, emotional and financial position are also risk factor.

Income level

Investor’s income level and expected returns influences investment decisions. Income level also determines the level of risk tolerance. Investment is based on the amount available after tax; therefore tax saving investment options can offer good rebates. To increase the income level, investors choose markets like government bonds, money market instruments that yield high returns.

Time perspective

The time, at which the investments are required, whether the investment should be short or long term, age factor and the time to recover from a loss are pertinent factors while making an investment decision.


Investor has to choose a portfolio based on the liquidity requirement of the investment. For immediate liquidity, money markets and investment in stocks can be made. However, easier the rate of liquidity, lesser is the return. For investors who aim for greater returns and can opt for illiquid investments like real estate, hedge fund investment and private equity.

Building and managing a suitable investment portfolio can be done by yourself or you can approach your financial advisor. All factors like liquid worth, net worth, risks, income and expenses are taken into account. Diligence is required for estimating the constraints and risks. More articulation in planning facilitates a better portfolio and helps achieve investment goals.

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