When we plan for investments, the first and foremost activity is to know why one is investing for. What is the goal to be achieved is of prime importance as it decides what kind of investment avenue to opt for. Everyone has some common goals like children’s education, home/vehicle ownership and retirement. Each of these goals has different timelines and so same avenues may not work in the investors’ favour.
One has to choose a combination of avenues i.e., the proportion of allocation varies even if the avenue is same. The active management of allocations among the assets and the rebalancing of their allocations depending on the market situation and especially the timelines is a tedious process. So, when we’re very sure of the timelines particularly for children’s education or even retirement then it’s easy to envisage the goal direction and which avenue to look for.
Source: https://www.thehansindia.com/business/what-when-why-and-where-to-invest-762240
