Create a successful investment plan

October 3, 2017 Trevor Ollen, Senior Financial Advisor

Create a Successful Investment Plan

When it comes to saving your hard-earned dollars, you want to make the most efficient and lucrative investment decisions. While it’s advantageous to contribute regularly to a savings plan, it’s very important to know exactly what it is you’re saving for so you can use the most effective tools to reach your goals.

Determining your values to set the right financial goals

“The best place to start is to determine what your values are - what do you want out of life?” says senior financial advisor, Trevor Ollen. “I know, that's a big question! Often I find it's best answered with some help, someone to challenge you into thinking about what it is you really want.  Once that is answered, all of your future actions, your work, how you spend your time, and even how you save, should be based on what you've decided about how you want to live your life. You can then create goals for yourself that mesh with what you value."

For example, if you value spending more time with your family, you might have a goal of being able to take them on two vacations each year instead of one. Having the money to spend on two family vacations is your goal, and the actions you take to reach that goal are directly connected to what you want out of life. In this case, it is to spend more time with family. 
 
“You can’t possibly invest effectively without understanding your values and what you are saving for. When clients don't stop to think about their values, I often see them setting goals that they end up regretting once they achieve them. I've even seen clients who resent all the prior sacrifices they've made before they had someone help them discover what it is that they truly value."
 

Investing to meet your goals


“Knowing what you are saving for drives the vehicle you choose to invest in,” said Ollen. “For example, if you’re saving for retirement, using a regular savings account is a really inefficient vehicle to meet that goal. In the same way, if you’re saving to take a vacation in a year, using a high-risk mutual fund that could flop if the market goes down isn’t a smart vehicle for that goal either.” 
 
Consider this analogy when deciding how to invest to meet your financial goals. Imagine you want to save to go on a big vacation. Compare saving for that vacation like taking a trip from Calgary to Banff. It’s not too far, but chances are you’d have a hard time getting there if you went on foot. In the same way, you probably wouldn’t meet your savings goals by dumping your money into a regular, low interest savings account. At the same point, you wouldn’t consider taking an airplane because it’s not far enough to justify the cost, and that would be overdoing it - just like if you made high-risk, aggressive investments to save for your vacation. The best way to get from Calgary to Banff, or to reach your savings goal, is by car. A car is reliable, and although it’s not completely without risk, the risk is minimal, and you will be able to save for that vacation more efficiently and effectively.
 

An investment savings plan will keep you on track


Whether you’re saving for retirement, a down payment on a home, or a major purchase, sitting down with a financial advisor to create a realistic savings plan will ensure you reach your financial goals. 
 
 “Having a written plan helps you to make the right decisions when it comes to market volatility or even making big, emotional purchases. Think of an investment plan as an anchor throughout the years. It helps you stay on track,” said Ollen. 
 
 Even if you have determined your values, set clear financial goals, and are following a well-thought out plan, over the years you may feel pressured to change your plan. This often happens if something negative happens with the market, or if you are tempted to make a big, emotionally-driven impulse purchase. Not to worry! At these times, the best course of action is to review your investment plan to remind yourself of your goals and, if necessary, tweak it without straying too far from meeting those original goals. 
 
“If you were to ask a pilot if they followed a flight plan every time they fly, the answer will always be yes,” shared Ollen. “If you asked them how many times a flight plan goes exactly as planned, they would probably say never. Things like weather and other factors might cause some adjustments in the flight plan, but having the flight plan helps them decide exactly what to do and is always used as a guiding point. The same goes for a proper investment plan.”
 

How we can help


Managing your finances and committing to a savings plan is ultimately your responsibility, but there are people and resources that can help. An experienced financial advisor can help you determine what you are saving for so you can set (and reach) those personal and financial goals.



ATB Wealth consists of a range of financial services provided by ATB Financial and certain of its subsidiaries. ATB Investment Management Inc., ATB Securities Inc., and ATB Insurance Advisors Inc. are individually licensed users of the registered trade name ATB Wealth. ATB Securities Inc. is a member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada.
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