Investment Planning Strategies: Step-by-Step Guide

investment planning strategies

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We plan so many things in our lives. The realisation of plans calls for aims, organisation, information, and compromise. Successful plans also call for a good deal of financial planning. Pursuing an investment planning process ought considerably to amplify the possibility of developing a winning financial plan. 

What are the 4 investment strategies? Or How do I set up an investment strategy?

  • Defining your financial aims and goals

The aims and goals will guide the Investment planning strategies and ought to offer a roadmap for your financial future. They ought to contain the following features: achievable and quantifiable; uncomplicated and have a defined time-frame; a distinction between your needs and wants. 

They ought to be agreed upon and documented with your financial advisor to aid you to measure progress. They ought also to be reviewed from time to time to get hold of changing situations, making sure they stay relevant. ; 

  • Collecting together your financial and personal information

The financial planning process and subsequent success will be contingent upon the clarity and quality of the information you communicate to your advisor. The latter will finish a thorough financial fact-finding assessment to grasp all pertinent & liabilities; risk attitude, capacity, and tolerance. ; 

  • Analysing your financial and personal information

Your financial advisor studies the info offered at the above step. He uses it to make a report that mirrors your ongoing financial profile. The ratios given below are produced to better your understanding of your financial circumstances, amplifying areas of weakness or strength: solvency ratio; savings ratio; liquidity ratio; debt service ratio. 

Your attitude, capacity, and tolerance with regard to risk are evaluated with the aid of a psychometrically designed risk tolerance questionnaire regarding investment assets. This is also assessed to evaluate your asset allocation for Investment planning strategies objectives. ; Learn about Forex risk management strategies.

  • Development and presentation of the financial plan

The financial plan is built on the basis of the info gotten in step # 2, and e analysis is detailed in the step given above. Each of the goals and aims in the very first step ought to be addressed, a recommendation for each pinpointed. These will embrace – 

  • Net worth statement/a balance sheet;
  • Annual consolidation tax calculation; 
  • Annual consolidated tax calculation;
  • Annual cash flow report – showing surplus/deficit. 

Presented, the report is explained, discussed, then signed by both advisor and client. 

When plan analysis and development are finished, the advisor will delineate the course of action most beneficial to you. This could be concerned with the implementation of : 

  • New pension/investment strategy; 
  • Changing debt advisor; 
  • Additional life or serious illness insurance; 
  • Income & expenditure adjustments. 

The advisor may see to the implementation of said recommendations. Conversely, he could be your coach keeping you in the loop while managing the process with inputs from investment managers and accountants. He may also deal with financial product providers. 

Investment planning is a dynamic ongoing process that calls for continual monitoring. The review of the action recommended in the plan ought to be regular. The goals ought to be reviewed each year to take into consideration changes in income, asset values, business or personal circumstances. 

What are the steps in the investment planning process? Or What is the best strategy for a beginner investor?

Your Investment planning strategies are akin to your game plan to build your portfolio. The strategy has to be compatible with your life goals and investment objectives.

We usually spend a decent amount of time planning sundry things. However, we ought to pay equal attention to mapping out our investment strategy and plan for growing and retiring. 

Investing your money sans Investment planning strategies is akin to a football team entering the field minus their playbook. Creating an Investment planning strategy has to be your topmost priority. 

Defining Investment planning strategies 

The majority of financial planners are in agreement that the following are the starting steps to a successful investment strategy: 

  • Refrain from paying high-interest rates on credit cards and other debt; 
  • Try to save 10% of your income; 
  • Have a minimum of 3 months’ expense saved in cash; 
  • Invest a fixed dollar amount monthly in the stock market; 
  • Plan an investment in stocks for a minimum of 5 years.  

An Investment planning strategy is an instruction booklet that guides you thru the investment process. It can aid you in jettisoning many probable investments that could perform poorly over time or that are not suited to the investment goals you are seeking to achieve. 

When designing an Investment planning strategy it is vital to quantitatively figure out what you are trying to achieve. Saying that you only want to make money does not help. A better aim would be your setting the target of an average of 8% average annual return on my investment contributions over the coming decade to have a GBP 200,000 portfolio that could be used to buy a second home. 

The more clarity regarding the aim, the better. And that’s not all. There are diverse Investment planning strategies that apply to diverse investment aims, the key is pairing the right strategy with the right aim. 

Investment planning strategies – Types 

Value investing: Investment planning strategies 

There are diverse investment types. However, the most popular one is value investing. The principle underpinning value investing is simple – purchase stocks that are affordable. They ought to be based on their long-term earnings potential. Under-priced stocks are to be found thru research on underlying companies’ fundamentals. It takes months or years for their price to appreciate. 

The buy and hold strategy demands a patient investor who aims to keep money invested for a handful of years. If you are planning on investing in the stock market for a minimum of 5 years, consider PrimeFin. It is the best place to get stock packs.  Read our Primefin Review.

Income investing 

A commendable way to build wealth over time, income investing is concerned with buying securities that typically pay out returns at a steady pace. Bonds are the best-fixed income security. The strategy includes dividend-paying stocks, ETFs, real estate investment trusts, and mutual funds. Fixed income investments offer a reliable income stream with minimal risk the investor is going to take, ough to make up at least a small part of the investment strategy.  

Growth investing: Investment planning strategies 

An investment strategy that concentrates on capital appreciation. Growth investors search for companies showing signs of above-average growth, even if the share price appears unaffordable in the light of price-to-earnings and price-to-book ratios. 

Growth investing is concerned with investing in smaller companies with greater growth potential, emerging markets, and chips. 

Small-cap investing: Investment planning strategies 

An investment strategy is suitable for those planning to take on a bit more risk in their portfolio. Small-cap investing concerns itself with buying the stock of small companies with smaller market capitalisation small-cap stocks attract investors owing to their knack for staying unnoticed. 

Large-cap stocks will frequently inflate prices given that they are in the limelight. Small-cap stocks are less conspicuous since investors get risk-averse. Also, mutual funds and other institutional investors have restrictions when it comes to small-cap investing. Small-cap investing ought just to be used by more seasoned stock investors, given their higher volatility. 

Going about choosing your best investment planning strategy 

Setting up your own investment strategy is akin to buying a new car. Scouting around is fine, if you know what you are looking for there are several questions that need answering before you settle on your style. These questions are also portfolio builders: 

  • What is your investment horizon?; 
  • What returns are you expecting?; 
  • How much risk are you willing to tolerate?

Deciding your breakdown between cash, fixed income securities, and stocks starts your investment strategy. Asset allocation breakdown finally depends on risk tolerance. A conservative investor may prefer to hold 80% of his portfolio in fixed income, 20% in stocks. For an aggressive investor, the obverse holds true. A balanced investor has a 50/50 split. 

Regarding particular investment strategies within your asset allocation, in case you are a long investment horizon high-risk investor, you may wish to include small-cap and growth investing in your portfolio. You may like value and income investing more when you have a low-risk tolerance.  

Investment planning strategies: invest cash you will not be needing for 5 years 

There are saving /investing instruments like the IRAs which are inflexible to the extent that they do more harm than good. They come attached with preconditions like withdrawal age limits and attendant tax implications. You are savvy if you steer clear of such murky waters. 

However, we are not entirely blaming such instruments, if only for the reason that their basic premise remains true. It is simply to disincentivise you from investing cash you will be needing in 5 years. 

Investment planning strategies imply oodles of patience. And with good cause – you ought to give your assets time to weather the ups and downs of the market. 

Brokers like PrimeFin offer both taxable and tax-advantaged accounts. 

Investment planning strategies: explore passively managed index funds 

As a rule, you want to make a balanced portfolio even as you keep costs down. The majority of investors depend on mutual funds, exchange-traded funds, and index funds to that end. Instead of betting on any one company stock, these funds pool stocks together balancing out the winners and losers. 

These funds are based on Investment planning strategies that are passive. Passive investing aims just to match wider market gains relative to active investing that tries to outperform the market by buying and selling stocks now and then. 

Being savvy market-wise, you’d also be knowing that if you invest in a low-cost index fund that closely tracks the S&P500, you are sure to see better returns relative to the average mutual fund. 

Investment planning strategies that are passive also imply fewer fees. There’s less chance, therefore, of erosion of long-term investment growth. 

The average passively managed fund had an 0.13% asset-weighted fund expense ratio, relative to 0.66% with actively managed funds. The cost difference has ignited a growing array of portfolio managing Robo-advisors – as with PrimeFin – permitting lower fees relative to actively managed accounts.  

Investment planning strategies: restrict active stock trades to 10% of a portfolio 

If you are looking for buying stocks, try to limit these to 10% of the total investment portfolio. What’s more – actively managed stock market strategies that aim to beat the market regularly perform less well than passive Investment planning strategies. 

If you invest all of your capital in one or a handful of companies, you’d be betting on success, possibly susceptible to a rude halt by a single regulatory hitch, market competitors, or a PR disaster. If you have a strong interest in active trading with a part of your portfolio, some brokers like PrimeFin provide educational tools and demo trading permitting a comprehensive preview of the real deal before you jump in. 


Good Investment planning strategies are less about timing the market than giving a broad portfolio of investments the time it needs to grow. Stock market trading does not always have to be all frenzy. As it turns out – here, too, slow and steady can indeed win the race. 

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