Build Your Investment Plan

Define Your Goals: What are You Saving For?

The first step in putting together your investment plan and determining your strategy is figuring out why you're saving in the first place.

You might have a short-term goal, such as a down payment for a home or a deposit on a new car. Longer-term goals might include retirement or a child's education.

Being able to state your goals clearly is an important step toward achieving them. Setting goals helps you take control of your financial life and can keep you motivated as you move closer to whatever it is you're saving for.

Investors come in all shapes and sizes — and your investing goals and strategies are likely to change over time. Life events, career shifts and, of course, how much time you have to achieve your financial goals all play a part. Nothing is carved in stone, so even if you set goals to get you started, you can always revisit them to make sure they still make sense.

What Kind of Investor Are You?

Your investor profile is determined by the level of risk you are willing and able to take to potentially earn higher returns. Typically, the higher the potential return of an investment, the higher the risk.

The graph above shows the relationship between investment risk and potential returns, as well as suitable asset mixes for different types of investors.

For example, an appropriate asset mix for a Secure is mainly fixed-income securities (low risk, low return). In contrast, the portfolio for an Aggressive Growth profile holds mainly equities (high risk, higher possible returns).