An investment is an asset that has been acquired with the purpose of gaining profit. It involves putting down capital and can either be done short term or long term, depending on the investment.
Investment vehicles are any means by which an individual or a business can grow their money, through investing.
A wide array of investment vehicles are available, and they could either be of low risk or of high risk. Some of them include bonds, certificates of deposits (CDs), stocks or even annuities such as Exchange-Traded Funds (ETFs) and mutual funds.
Setting financial goals is very important as it gives you a base on what to focus on. Here are some of the reasons why your investment vehicle should align with your financial goals:
1. Having a portfolio that has a mix of investment assets is important as it will let you have both high risk- high return portfolios and low risk – low return portfolios which will reduce the overall exposure, allowing you to benefit from high risk – high return investments.
2. Building mid term maturity assets will help fund your career progression goals like learning a new skill, advancing your education or even buying a car.
3. Investment suitability is measured by whether the risk and returns are contributing positively to your portfolio, as well as whether they are suitable for your needs, be it individual or as a business.
4. Converting your goals and aspirations into a solid financial plan that is boosted by your personal vision of success. One should make goals that have clear steps that you can achieve financially by allocating a budget for each, be it short-term, long-term or even medium term.
Investment vehicles are very beneficial if you have the right knowledge and the right motivation. Aligning your financial goals to your investment vehicles will give you a reason to look for more. Putting down your goals on paper will add on to your chances of accomplishing them.