CapitalTime

Articles on investing and capital management, with a quantitative focus.

Investment goals

2019-06-07

Different investors have different priorities. Here, I describe my own investment goals to provide context for the articles I write.

My goal is a moderate real return (meaning the return after inflation), to preserve the purchasing power of my capital. I would like to grow my savings over time, but don’t expect an outlandishly large return. I don’t expect to get rich by investing.

I’ve accumulated savings by working and believe that work is the only viable path to riches (ignoring random luck such as inheritances or lottery wins). For me, investing is just a way to preserve wealth and preserve purchasing power.

Because I’ve worked very hard to accumulate my savings, and don’t have the benefit of back-stops such as a pension, I also want to make sure that I don’t lose my existing capital. Therefore, I want an approach which:

• is well diversified
• is unlikely to fail catastrophically
• doesn’t have wild swings in value
• prefers stability over high returns

These priorities led me to the PRP allocation.

Finally, I want to use methods that I can stick with long term. Turbulent markets cause people to second guess their approaches, and I don’t want to put myself in a position where I keep changing or pivoting between strategies. My ideal investment strategy is one that I can comfortably stay with whether or not the stock market is strong.