Indeed. Not all goals are similar. Few are long terms goals like housing, education and few are short terms like world tour or the next new car and then there are the extreme long-term ones like retirement income goals. Time buys you the luxury to offset risk. Long terms goals can be fulfilled with medium to moderate risk, while short term goals bear higher risk due to shorter timelines and faster reward generations.

At Finvest.Ai our aim is to get the maximum/optimum return/reward for your invested capital. Through a blend of various asset classes with varied return rates and risk classes we assist you in achieving those multiple goals in a more synchronous way.
Traditional investments in fixed income products like fixed deposits and govt bonds not only impact your maximum potential to earn but also limit your capacity to think and achieve greater things in life. Refer to our blog “thing big think better” for better context. That said we aim to get maximum returns with optimum risk and guide you on the go to recalibrate the risk and reward parameters.

For starters imagine all the red and black dots as various investment portfolios. As an investor your portfolio will end up being one of the many red/ambers/blue color dots. Few with high risk and high returns while others where the risk is high, and returns are moderate.
The optimal portfolio does not simply include securities with the highest potential returns or low-risk securities. The optimal portfolio aims to balance securities with the greatest potential returns with an acceptable degree of risk or securities with the lowest degree of risk for a given level of potential return. The points on the plot of risk versus expected returns where optimal portfolios lie are known as the efficient frontier.
Let’s us explain you step by step the journey of a retail investor.

Many a time new retail investor tend to be super conservative and end up being in Zone 1.
This happens due to multiple factors like sheer fear of losing wealth, extremely low risk appetite, lack of guidance or proper understanding of financial asset classes and risk-reward relationships. This leads to a highly underutilized portfolio generating low or minimal returns

Due to incorrect selection of asset classes, investors at times tend to expose their capital to comparatively higher risk while still generating lower or average returns. This is by far the trickiest situation an investors portfolio can land into. Besides low or moderate returns an investor might also end of loosing his capital due to high-risk exposure.

Through some bit of guidance and knowledge quite a few investors make it to Zone 3 where in they can increase the return on their investments through high risk. While this sounds convincing what if we tell you that you would not want to expose your capital to such risk and while optimizing the same and expect similar or higher returns and that’s where the Zone 4 investors exist

In the below picture the all the green dots on the green curve are Zone 4. That means for varying levels of risk for all type of investors there’s always an optimized portfolio existing where in the risk is optimized and the returns are maximum. No matter what your risk and return expectation is the efficient frontier will always have an optimum portfolio for you. This not only means better returns but also safer returns

Do remember the world is everchanging and there’s no one solution fits all option available for any investor. Goal based investing is a custom made and personalized solution. Remember that tailor made suit that fits you well and not to your cousin (if you have one who tried borrowing it). Know why? Because that was stitched to your needs and preferences.
An investment plan which a based on personal goals is similar to that personalized suit that we just spoke off.

1. Efficient frontier is based on historical data. Correlation will change so will the composition and recommendations. What is today will become history tomorrow and will shape your portfolio accordingly. Our learnings from last 50 years while will chart out our present and on the other hand what is today and tomorrow will pave the way for your future.
2. With the changes in underlying factors like socio economics drivers, GDP and inflation rates, foreign exchange rates and many more the “ideal” portfolio will change. While this change is not radicle but subtle and will change the composition in long run basis our ongoing learnings
3. There and limitless asset classes and investment avenues and so are the multiple combinations. Let’s say a million combinations to choose from (and yes, it is in millions). Through our trademark algorithm we recommend the most optimum asset classes and combination of those asset classes basis your risk reward appetite. Just a quick reminder risk appetite is inversely related to the time by when you must achieve a certain goal.
4. Overheads costs like brokerage fees, management fee and taxes are not considered while churning out these recommendations. These may or may not have a significant impact on your bottom-line returns.