Defining investment objectives sets the stage for everything else in your portfolio construction process. Are you aiming to maximize returns or focus on risk management? Understanding your goals is critical.
- Defines what to achieve with investments.
- Clarifies the relationship between return and risk.
- Helps set time-based financial targets.
- Aids in effective resource allocation.
- Provides a foundation for monitoring progress.
Potential challenges include aligning diverse stakeholder objectives, which can be mitigated through structured stakeholder consultations.