Steps to Creating Your Investment Resource Allocation Plan

Investment resource allocation refers to the strategies an individual uses to organize their investment portfolio to minimize investment risks and optimize returns. When making investment decisions, you need to consider factors such as personal goals, level of risk tolerance, and investment time horizons.

Investment planning can be unnerving, but creating a strategic investment resource allocation plan will enable you to invest with confidence and with clarity about your future.

Here are some fundamental steps to creating your investment allocation plan:

1.       Customize your plans around your desired life goals

You have short-term and long-term hopes and dreams for the future including your intended plans for life after retirement. To ensure you can achieve these goals you require a well-outlined plan for you to follow. Your customized plan will not look like anyone else’s plan, because your desires are personal to you and your financial situation. Your ideal resource allocation will involve building your plan around your specific goals.

2.       Minimize risk while optimizing return

You need to be hyperaware of your risk appetite and design your investment portfolio accordingly. It is crucial to strike the delicate balance between working within your risk tolerance and ensuring acceptable rates of return on your investments.

3.       Create a plan that you can stick to long-term

A well-thought-out resource allocation plan ought to be able to serve your interests and long-term goals no matter what. You must create a plan you are confident enough with to ensure you will resist the urge to abandon it as time passes. Volatility in investments is to be expected, but if you are prepared for the up and down movements on your portfolio, you should not have to make major changes to your resource allocation plan often. Keep steady knowing your plan is built upon solid strategy and not emotional decisions.

4.       Be flexible enough to re-evaluate and adjust your plan if your goals change

Changes in your life may lead to your goals shifting. The changes may be positive such as a new child or a shift in your career, or negative such as ill-health or the untimely death of a loved one. These are things we may not have foreseen and need to adjust for. Be willing to occasionally adjust your resource allocation plan, but also to remain on your main course.

Your journey to financial independence won’t always be straightforward. Have a solid plan for your finances, be disciplined, and keep your eye on the ball at all times. As you work on your finances, you may still make mistakes and that's fine – as long as you learn from them and make corrections accordingly.

Ready to create an Investment Resource Allocation plan that will get you on the path to financial freedom? Book a free 30-minute Zoom session and let’s talk HERE.