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Setting Investment Objectives
A generalized financial goal incorporating your unique personal desires can have inspirational value and serve as a good starting point for the development of specific investment objectives.
It is very important not to confuse the terminology “asset allocation” with a statement describing an investment objective. The objective describes the result that is desired while the asset allocation is the way to achieve that result.
An investment objective should be:
- Realistic
- Measurable
- Have sensible time frames for measurement
An investment objective should include:
- Your investment time horizon
- Your tolerance for short and medium term negative total returns
- Your tolerance for taxable gains or income
- Other unique preferences
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