We have spoken quite a lot about Goal-based Investments. Yes, investment goal is the primary and most important parameter used for how to choose mutual funds. Investment becomes headless when it doesn’t have a goal.
There are three goals that you should park in your mind.
- Materialistic Goals (Dream Home, Dream Car, Retirement planning, etc.)
- Target on any Corpus(e.g., 5 Crores, 10 crores, etc.) with Timeline.
- Expected Return
Why do you need a clear goal/vision while investing?
Goals are like destiny and stand far from the starting point. So, if you don’t have clarity on your investment goal, you might fade away (exit from mutual funds) when you find volatility in the stock market.
For Example, Your Goal is to build a Dream Home in the next 15 years.
The total cost will be 60 lakhs to build your home.
Now, the hidden holes are either monthly investments or returns.
On average, mutual funds provide 12-14% returns in long run like 15 years (Sensex has performed 12.87% CAGR for the last 35 years).
With all the available data, we will be calculating the monthly investments with the help of the SIP Calculator.