Table of Contents
- Why you should set investment goals [Jump to this section ]
- Consider what you are investing for [Jump to this section ]
- Ensure your goals are S.M.A.R.T. [Jump to this section ]
- Consider private alternative investments [Jump to this section ]
- Meet with your financial advisor to discuss your goals [Jump to this section ]
Making changes to set new goals
It’s that time of the year again: time to review last year’s resolutions and reflect on the year that was. At year-end, we’re all busy evaluating our accomplishments, successes, and growth, as well as our missed opportunities, and where we fumbled. We assess where we fell short this past year and make changes to set new goals and resolutions for the next year. While you’re planning your 2022 resolutions, why not set goals for your investments as well?
According to a recent Sun Life report, only 26% of Canadians have set financial goals for 20221. This is concerning, given how the last couple of years have thrown many Canadians off-balance financially and have proven the importance of financial preparation. The beginning of the pandemic saw massive temporary and permanent layoffs and salary reductions. Further, May 2020 recorded the highest unemployment rate in since 19662. While Canada is slowly recovering and moving forward, we must remember that if the past 21 months have taught us anything, it is that life is unpredictable, and it is always better to be safe than sorry.
Why you should set investment goals
Without specific objectives, even the most diligent of savers can stray from the path and become entangled in unplanned expenses. Having S.M.A.R.T. (specific, measurable, attainable, relevant, time-based) investment goals can incentivize you to allocate a percentage of your income for a secure future and contribute to your retirement funds or other future lifestyle goals.
Now that you’ve decided to set investment goals, it’s time to consider all factors that will help you determine those goals. Whether you’re a savvy investor or want to start investing in 2022, here are four considerations that will help you get started:
1. Why am I investing?
Knowing why you’re investing is just as crucial as setting your investment goals. You could be saving and investing for something as simple as a new car, or something more future-focused such as a secure retirement. The purpose of your investment helps you in deciding certain guidelines, such as the duration of the investment time horizon, the type of investment, and the level of risk you are willing to take. Understanding the “why” also assists you in deciding if you want to receive regular distributions or simply allow your investment to grow.
2. Are my goals S.M.A.R.T.?
To maximize the rewards of investment, it is critical to create S.M.A.R.T. goals. Set a ‘specific’ objective, complete with real figures and deadlines. Check to see if your objective is ‘measurable,’ so you can track your progress more easily. Make sure the objective is ‘attainable;’ it might be a difficult goal, but do not create expectations that you know you cannot meet. Your goals should also be ‘relevant’ so that you are working toward accomplishing something you actually want. Last, they should be ‘time-bound;’ that is, they should be something you can accomplish within the time frame you have established.
3. Should I consider private alternative investments?
The public markets can be quite volatile, due to them being heavily influenced by factors outside of the company and financial performance.
Private alternative investments are typically comprised of investors who purchase units, or shares, in private alternative entities (rather than traditional investments such as stocks and bonds) and earn returns as the entity grows. They may pay out regular distributions or offer a distribution re-investment option. Some private alternative investments do not trade on the public markets and hence may provide less volatility than their public counterparts. It’s important to note that many of these types of investments have eligibility requirements, particularly in terms of net worth or income. When considering a private alternative investment, it is important to do your due diligence and evaluate the investment’s management, historical performance, and redemption process.
4. Have I planned to meet with an expert to discuss my goals?
A financial advisor is a valuable asset whether you’re a seasoned investor or just beginning to invest in 2022. If you are considering private investments, your advisor can also assist you in determining your eligibility to invest. Before meeting with your advisor, make sure you have a clear understanding of why you want to invest and the outcomes you are expecting. Before making a decision, thoroughly weigh the benefits and drawbacks. An advisor can offer you the facts and information you need on the investment offering to make an informed decision, but keep in mind that each investment comes with its own set of risks, and you should always invest at your own discretion.
Vice President, Wealth Solutions
Ray Punn is an experienced leader in management across the public and private sectors, including the Financial, Automotive, and Private Equity industries. As Vice President of Skyline Wealth, he leads a comprehensive team of Advisors, and oversees business operations, marketing, investment management, and investor relations. With a deep understanding of how each component of wealth management contributes to an exceptional investor experience, Ray and his teams focus on building long-term partnerships with Skyline Wealth’s valued investors.
 “Over half of Canadians say they have not set goals for 2021.” Page 1. Sun Life, https://www.sunlife.com/en/newsroom/news-releases/announcement/over-half-of-canadians-say-they-have-not-set-goals-for-2021/123495/ Accessed on December 13, 2021.
 “Canada Unemployment Rate.” Trading Economics. https://tradingeconomics.com/canada/unemployment-rate#:~:text=Unemployment%20Rate%20in%20Canada%20averaged,statistics%2C%20economic%20calendar%20and%20news. Accessed on December 13, 2021.