Investment guide

Why it’s important to have investment goals

Setting investment goals is a key first step when it comes to planning for your financial future. They can help to identify and define your short, medium, and long-term financial objectives. They also help you stay focused and motivated as you work towards achieving the goals. 

Set investment goals

Understanding your investment goals can provide a sense of purpose when investing, as well as to measure your progress over time. It is important to consider your short, medium, and long-term goals as well as the timeframe in which you’d like to achieve these goals. Knowing your goals and timeframes can then help you to decide which types of investments you'd like to invest in. 

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Short, medium, and long-term investment goals 

Short-term goals may include saving for a vacation or new car and are usually what you'd like to achieve in the next 1-5 years. 

Medium-term goals are generally what you'd like to achieve within the next 6-10 years. These goals could include saving for your first home, home improvement projects or the kids school fees.

Long-term goals, think 10+ years, may include saving for a comfortable retirement or setting up a university fund for children. 

Investment risk appetite

Investment risk appetite is an individual investor's ability to tolerate the risk associated with investing in various types of investment assets. As an investor, your risk appetite can be determined by your goals, timeframes, and risk profile. Risk appetite can vary from one investor to the next and can be influenced by a variety of factors such as age, income, investment goals, and investment experience. 

Investors with a high-risk appetite may be more likely to invest in high-risk assets such as shares and property, while those with a low-risk appetite may be more likely to invest in low-risk assets such as cash and bonds. Ultimately, the amount of risk an investor is willing to take should be in line with their investment goals and risk profile.

To help you understand your own attitude toward risk, you can seek financial advice or work out your risk profile at sorted.org.nz.

Set realistic goals

When setting your personal investment goals, they should be simple, realistic, and achievable. Unrealistic expectations can lead to disappointment and can cause you to abandon your goals. It's important to set clear and achievable goals as they will help you stay focused and motivated.

Think of what you want to accomplish with your money, such as saving for retirement, buying your first home, or starting a business. Once you have a goal in mind, you can then look to explore the following:

  • The time it will take to reach your goal.
  • The amount of money you'll need to achieve your goal.
  • The potential investments that may help you to achieve your goals and the associated risks.


Have a plan to achieve your goals

Once your goals have been established, create an investment plan for achieving them. This plan should include a detailed budget, an understanding of the available investment options, and time frames for achieving your goals.  

You should consider diversifying your investments to minimise risk. For example, if you want to save for retirement, you might want to consider investing in a mix of stocks, bonds, managed funds, and real estate.

You might also want to consider how your personal ethics match your potential investment choices. Sustainable investment is about considering the impact our investments have on society and the world around us.

Regularly review your goals

Regularly review your investment plan to ensure that you’re still on track to meet your goals. The key to successful goal setting is to consider your unique financial situation and personal goals. Think about things like age, income level, risk tolerance, and investment goals when determining the appropriate investment strategy for you. Remember, investment goals can change over time, so it is important to review and adjust your plan as needed.

Investment goals are a crucial part of financial planning. They provide clear and achievable goals to work towards and help keep you motivated. They also provide a way to measure your progress over time and make any necessary adjustments to keep you on track. By setting investment goals and developing an investment plan, you can help ensure that you are on track to reach your goals.

Ready to start investing?

At AMP, we offer a range of investment options that may suit you. Because everyone's needs are different, you should always seek financial advice or other professional advice relevant to your personal financial situation. For financial advice, we recommend you contact your Adviser. If you don’t have an Adviser, contact us on 0800 267 5494 or find an adviser online.

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