Goals-Based Investing: An Overview
To most savers, money is a means to an end. Yet the shift from defined-benefit pensions to self-directed 401(k) programs thrust Americans head first into the investment markets. Nowadays, the process of saving and investing is equivalent to shopping at a complex financial grocery store. Investors with insufficient information are forced to choose among a dizzying array of products that may-or may not-address their needs. A better approach is goals-based investing. By matching investment time horizons with an investor's cash flow needs, goals-based investing insulates your emotions and lifestyles from the vagaries of the market. This approach sets the goals as the objectives and works backward to build an optimal portfolio allocation for each of them. Jack Ablin will walk you through a goals-based planning and investment process and demonstrate how managing portfolio risk effectively can often play a bigger role than investment return in accumulating wealth over time.