RankMF Baskets – The Best Approach to Goal Based Investing

Goal based investing is a powerful method which can help you against market fear and uncertainty by better managing your financial preferences. Investing according to your unique goals and time horizons encourages you to look beyond short-term market volatility and help you stay invested for long term.Without a proper goal based investing plan the financial growth could saturate beyond a point. However, many people don’t invest either because they think it’s risky or because they don’t understand it completely. Also, there are various other reasons which makes it difficult for investors to choose and start investing in the right mutual funds.


How an investor currently does goal based investing?

When an investor starts to look for the right mutual funds to invest to achieve their goals, they google around a bit to discover & understand the basics but find themselves overwhelmed by the sheer amount of seemingly complex and even contradictory advice on the internet and various mutual fund investment apps.Furthermore as a goal-based investing process they identify two or three goals and then consolidate all the investments to achieve those goals. And the mutual fund selection is majorly based on the historic returns & performance of the funds.Also they are unaware or ignorant towards the number of mutual fund schemes they should be investing to achieve their financial goals. They tend to make a rookie mistake of investing either in too many number of mutual fund schemes or too less. This ends up over-diversifying or under-diversifying their portfolio which may not be optimum to be on track to fulfil their investment objectives.So you may ask what is the correct approach towards goals based investing.

How should an investor approach goal based investing?

The objective for goal based investing is to accumulate corpus value with due diligent investments so that you have the right amount of money and the right time to meet your goals in the short, medium or long term. But due to the above mentioned approach of investing a lot of investors fall short of their estimated levels of money required for a goal. Goal based investing strategy takes into consideration an investors age, risk appetite, time duration and their current financial strength. Based on this they an investor should decide on the value of their current investments they make.For example, you want to accumulate Rs. 20 lakhs for your child’s education in the next 10 years, with an investment of Rs. 10000 monthly your consistent expected rate of returns should be atleast 10% or above. How will you ensure that the funds you have invested today are going to give you a consistent return of 10% or above to achieve your defined corpus target.These are the steps which you need to follow regularly so that you stay on track to achieve your goals.
    1. Identify the specific financial goal - define your goal and the future value you want to accumulate to fulfill that goal.
    2. Set a time horizon - decide a time period in which you want to achieve this financial goal. Based on the priority of your goal, set a time horizon like short term goal (1-3 years), Medium term (3-5 years) and long term goal (5 years+).
    3. Understand your risk appetite - every investor chooses a fund based on their risk taking ability. A conservative investor chooses less risky mutual funds whereas an aggressive investor goes for comparatively more riskier mutual fund investments.
    4. Select the right mutual fund - allocating your investments in specific mutual funds asset classes (equity, debt, hybrid ect) based on the risk profile and the time horizon to achieve it.
    5. Constant monitoring & rebalancing - Now that you have made your investments, you have to regularly monitor the performance of each of the funds so that you do not deviate from your set target amount and goal.
Seems a whole lot of homework doesn’t it? What if there is a unique method of goal based investing in mutual funds which does all this for you without any fees or charge of a financial advisor or investment planner.So to meet the needs of an investors RankMF introduced Baskets – A pool of expert curated best mutual funds clubbed under one Basket based on a specific goal, time horizon and risk-taking ability of the investors. This means for every unique goal there is a basket of best mutual funds consisting of the perfect asset allocation to achieve that goal in a set time period.These funds are selected based on RankMF’s tech-driven proprietary research method which evaluates 20 million data points on a daily basis to regularly assess a fund’s performance so that you don’t face the hassle of choosing the right funds to invest. You just need to decide what goal you are investing for and for what time based on your risk profile of aggressive, moderate or conservative investor. Not just that these baskets are regularly monitored by experts to see if any fund has become a non-performer to rebalance it with a performing fund so that you stay on track to achieve your financial goals. So this takes away the pain of constant reviewing and rebalancing of funds for you.18A_RankMF-Mutual-Fund-BasketsTo sum up...Here at RankMF we believe it does not make sense anymore to club various different goals and treat them identically by putting all investment together to achieve them collectively. Financial goals differ in terms of importance in your life, time horizon be it short term, medium term or long term and the level of risk the investor is comfortable with relative to each goal. Hence it becomes imperative to invest in a separate basket for each goal.There is a saying which goes by don’t put all your eggs in one basket. This stands true for your investments too. So mitigate your risk intelligently by investing in RankMF Basket and get the benefit of seamless goal based investing.You simply have to open a free investment account online with RankMF.com and choose a basket of your choice to start your goal based investing journey!

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