By admin on July 4, 2017
Goals-based investing addresses the holistic well-being of the family or foundation and directs transparent dialogues about ambitions, fears, and opportunities. It focuses on recommending appropriately designed solutions to achieve goals, tracks progress towards those goals, and adjusts the portfolio as necessary.
Goals-based investing is at the core of HighView’s investment philosophy, rather than the traditional industry model of measuring expected return versus market indices, which steers away from client goals and risk tolerance. Instead of asking “how can we increase returns or consistently beat the market?”, we ask “how can we achieve our investment goals with some degree of certainty?”.
This places performance in the context of achieving goals as the measure of success. Portfolio construction and investment performance is discussed in light of investment goals and risk tolerance as opposed to market dynamics. Ideally goals-based investing comes down to understanding the “purpose” of the funds, taking into consideration the levels of risk tolerance, the different investment horizons or liquidity constraints, and then focusing not on the gain or loss of the portfolio but on the probability of the portfolio to meet the financial and investment goals.
