Different investment strategies for different goals

26 Dec, 2016

It’s no big secret that most of us mull over this question ‘Will I have enough cash on retirement?’ While formulating a financial plan for the twilight years tends to be our main focus, there are several other things to save for during a lifetime. It could be anything from a vacation, down payment for a home, funds for renovations, child’s education and marriage, capital to start a business or even large purchases like a car.

Trying to figure out how exactly you can save for multiple goals appears like an intimidating task right? Goal-based investment is the answer. It aims at using different investment strategies to help meet your personal and lifestyle targets. Let’s dwell on a few.

Retirement Savings:

Saving for retirement is long term plan and best started early to outpace inflation. In fact, you should begin at least 30 years prior to retirement to see consistent growth. Your portfolio needs to be a mix of equity (60%) and debt (40%) funds. With advancing age, you can move progressively toward debt to avert short-term losses. Investment in Unit-linked Insurance plan (ULIP) for a long duration reportedly gives good returns.

Emergency Savings:

An emergency fund is important to tide over unexpected expenses such as home repairs, serious illness, accident or even a layoff. According to experts, this kitty should represent nearly six to eight months of living expenses. Given that the emergency fund has to be easily accessible, a savings account is a safe choice for 25% of your money. In addition, fixed deposits and liquid funds that come with ATM cards are good options.

Big Purchases:

If you a have a short time horizon, say about three years to make down payment for a home or to purchase a new car, adopt a conventional approach. A lump sum fixed deposit or systematic monthly contributions are a good bet. Alternately, a SIP in a short-term debt fund is a viable investment strategy.

Entrepreneurial Dream:

Balanced funds, which are a healthy combination of equities and debt are a great option for medium term investors. These schemes are advised by financial experts for goals with a time frame of say 4-6 years, like embarking on a start-up or pursuing an entrepreneurial dream.

College/Marriage Fund:

Higher education or marriage of a child is a big cash outflow that you must plan for on a long-term. Create a portfolio of diversified equity funds, large-cap funds, and balanced funds. You can also buy stocks and partly opt for safer routes like the PPF, bank deposits, and tax-free bonds. 

Short Term Objectives:

In terms of realizing your short term goals, be it a vacation, renovation, buying electronics or jewelry, and more, flexibility of withdrawal is an important criterion. Your investment plan should be such wherein it can be easily converted into liquidity when the need arises. Apart from a saving account, FD’s, liquid funds, bonds, fixed maturity plans and recurring deposits are reliable investment strategies.


How much you set aside for savings from your paycheck depends on your circumstances. However, the important thing is to get started.  If you adopt a goal based investment approach you will be able to meet all your aspirations with ease.  

If you are also interested in getting your articles published here, please mail them to This email address is being protected from spambots. You need JavaScript enabled to view it.

See here

Kotak moneywatch newsletter