How to Achieve Financial Goals through a Goals-Based Approach to Investing

We all have multiple financial goals, both short- and long-term. A goals-based approach to investing can help you stay on track to achieve your financial goals. What is a goals-based approach to investing, how can you achieve your financial objectives through a goals-based approach to investing, and what are the benefits of this approach?

Watch this short video summary if you prefer to learn about the main points in video format.

Goals-Based Approach to Investing

Goals-based investing is a holistic approach to managing wealth by aligning investments with life and legacy goals. It looks to bring discipline to investing by putting financial objectives at the forefront of the investment process.

Goals-based investing means that investment decisions are driven by your goals. The focus is shifted away from the markets and onto you. The primary objective is not to provide a rate of return greater than a market index, in other words to “beat the market,” but to align portfolio allocations to achieve your predefined financial goals.

High-net-worth clients often have multiple account types, each with different goals and objectives. Goals-based investing provides the flexibility of satisfying multiple goals with multiple portfolios.

Pension Fund Management as an Example of Using a Goals-Based Approach to Investing

Many public and private pension funds employ professional investment managers to invest pension assets.

Many of these pension funds set a real rate of return objective as their benchmark needed to obtain a fully-funded status.

As such, this is a good example of a goals-based approach to investing because the pension funds need to meet the pension benefit requirements of current and projected pension plan members.

Goals-Based Investing Process

Step 1:  Identify and Prioritize Goals

Identify and prioritize financial goals by differentiating between short-, mid-, and long-term goals as well as the relative importance and urgency of each goal.

Prioritizing goals helps to identify your risk tolerance. For example, you may not be willing to take on substantial risk with your most important goal or with shorter-term goals, but be willing to assume more risk to achieve a less important aspirational or longer-term goal with lower priority.

It is always helpful to consult an experienced professional for this process.

Step 2:  Align Investments with Your Goals

With the assistance of your investment professional, you can identify the appropriate investment strategy for your financial goals in alignment with priority and time horizon.

Step 3:  Construction of goal-specific portfolios

You may need to employ specific investment management expertise for each strategy. Goals may be impacted by life altering events such as employment change, additional children, a family death, divorce, retirement date change, or a cash windfall, among others.

It is very important to review your financial goals and investment strategies with investment professional at least annually and at the time of any major life altering event so that financial goals remain aligned with investment strategies.

Benefits of Goals-Based Investing

Goals-based investing purposely keeps your investment focus on attaining your predetermined financial goals. Additional benefits include:

Sets a Specific Investment Strategy for Each Financial Goal

Recognizes that you have different and multiple financial goals and accordingly, customizes the investment strategy to each goal rather than allocating assets to a generic portfolio, thus enhancing the achievement of your financial goals.

Redefines a Specific Performance Benchmark

Performance benchmarks are aligned with the individual financial objective. Any performance measurement to a market index is secondary as it is not necessarily a valid indicator for attainment future financial goals.

Reduces Stress During Market Volatility

Wards off emotional reactions to short-term market downturns. Helps to maintain focus on the long-term investment strategy because short-term losses can be shown to not affect long-term goals.

Maintains Financial Discipline

Without a goals-based investment strategy, it is easy to stray from your investment objectives and lose sight of your longer-term goals. Panic may set in due to lack of transparent goal tracking, resulting in abandonment of any investment discipline. Goals-based investing provides clarity and accordingly guidance for financial discipline.

Facilitates Tax Planning

Having used goals-based investing to map out your financial situation and applying customized investment strategies to each goal, tax planning can be carried out more efficiently.

Provides More Confidence About Progress

Because a goals-based investment strategy measures your progress relative to your specific objectives and not a general benchmark, you have greater confidence and clarity as to the progress of attaining your goals. 

Reach Your Financial Goals with Bloom Investment Counsel, Inc.

It is easy to become overwhelmed by how to achieve your financial goals, especially if they are far in the future or highly ambitious. Whether you wish to accumulate wealth, create an additional stream of income, generate retirement income, transfer family wealth, leave a philanthropic legacy, or any combination of these and other objectives, goals-based investing is appropriate because you have a specific “goal.”

As a trusted private, personal and professional investment manager with nearly 40 years of experience, Bloom Investment Counsel, Inc. can help you implement investment strategies specific to your goals utilizing our customized, investment management service.

Our prudent and patient approach to investing, along with our specialty of investing in dividend-paying stocks, are some of the many reasons why our long-standing clients, including wealthy individuals and families, family offices, foundations, corporations, institutions and trusts have entrusted us with their wealth over the long-term.

Learn more about Bloom Investment Counsel, Inc.’s customized investment management service.


Bloom Investment Counsel, Inc. is a well-established Toronto-based independent, privately-owned boutique investment management firm providing actively managed, customized Canadian and U.S. dividend-paying portfolios for wealthy individuals, family offices, foundations, corporations, institutions and trusts.

Founded in 1985, Bloom has experience in managing in excess of $2.5B in assets over the years. We believe that generating independent cash flow is central to the success of our clients’ portfolios because it provides capital for the present day, if needed, while continuing to preserve and build wealth for the future.

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This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.

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