Financial planners recommend goal-based investing for 2026; here’s why
As investors begin planning for 2026, financial planners are urging them to adopt goal-based portfolio planning rather than randomly buying schemes with the short-term objective of earning high returns, ET Bureau reported.
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, ET Online|
Jan 01, 2026, 01:25:32 PM IST
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New year planning
As investors begin planning for 2026, financial planners are urging them to adopt goal-based portfolio planning rather than randomly buying schemes with the short-term objective of earning high returns, ET Bureau reported.
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What is goal-based investing?
Goal-based investing is a strategy in which you invest with a clear and specific purpose in mind. Building a corpus within a defined timeframe to meet those objectives is known as goal-based investing.
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How to plan
Financial planners say it is important for investors to sit down and identify the goals they want to invest for. These may include both short-term and long-term objectives.
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First step
The first step, experts suggest, is creating an emergency fund worth at least six months of expenses so that financial goals are not derailed by unforeseen events. Once this is in place, investors should estimate the current cost of each goal and apply a reasonable inflation assumption to arrive at the projected cost in the target year.
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Next step
Next, investors should decide on the appropriate asset allocation, either on their own or with the help of a financial advisor. They can then work backwards to calculate how much they need to save—through SIPs, lump-sum investments, or a combination of both—to achieve each goal.
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How to use mutual funds
Mutual funds offer schemes across asset classes and investment horizons that can help investors meet their goals. For near-term goals with a timeframe of less than five years, advisors typically recommend a lower equity allocation, often through hybrid funds.
