Do I need an investing goal in 2024?

How to ensure your 'new year, new you' money goals don't wither on the vine.
By · 13 Dec 2023
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13 Dec 2023 · 5 min read
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Goal setting: Two words synonymous with the New Year, but which barely rate a mention past January. A turn of the calendar inspires us to set resolutions but many of these goals wither on the vine by Australia Day.

Does that mean we should even bother with goals when it comes to investing? On one hand, investing can be easier if you have a specific goal in mind. If you’re saving for a first home for instance, it’s easy to jump onto an online calculator to see how much you need to tuck away each week, fortnight or month – and for how long, to reach your preferred deposit. In this way having a goal gives you a target to aim for, and lets you track your progress.

But what if your goal isn’t precise? What if you just want to grow wealth or become financially secure? That’s where the beauty of investing comes in.

It’s not essential to have a particular goal in mind to grow a prosperous portfolio. Steadily tucking money away on a regular basis, year after year, will let you benefit from compounding returns. You may find goals form over time, and if you are already in the market it’s not a big deal to pivot your portfolio to meet these targets.

Three ‘ground rules’ to bear in mind

Regardless of whether or not you are working towards set goals, it is worth understanding some of the basic rules of investing. These ground rules apply no matter what you’re hoping to achieve, and they can – and should – shape your choice of investments.

1. Risk equals return

Etch this one on the bathroom mirror so you’re reminded of it each day: The higher the returns, the greater the risk you could lose money.

It’s a basic rule that has stood the test of time. Yet people are still attracted to investments promising high returns without fully grasping the risk involved. The cryptocurrency craze demonstrated this in spades.

If you aren’t comfortable with risk, put your money in savings accounts. They’re government guaranteed. But bear in mind that low risk means you won’t earn big returns over time – which brings us to rule no 2...

2. Spread your money around

The great thing about investing is the freedom to mix and match your choice of investments to come up with a portfolio that has a level of risk you’re comfortable with.

If you have a high tolerance for risk and a long range investment timeframe, you may want to put all your money in shares.

In my experience though, people tend to overestimate their risk appetite. At the first whiff of a market downturn, they panic and bail out of ‘lively’ assets like shares thereby cementing their losses.

That’s why it makes sense to diversify. Spreading your money across a variety of investments smooths out the highs and lows of asset markets, and lowers your overall portfolio risk.

There was a time (not so long ago) when investors needed a lot of money to truly diversify. These days, exchange traded funds make it easy and affordable to build a portfolio that captures a blend of the mainstream asset classes while reflecting your personal comfort for risk.

3. Invest in growth assets for the long term

Even if you’re not investing with a set goal in mind, there can be compelling reasons to include growth assets – shares (Australian and international) and property, in your portfolio.

These investments can pay ongoing income in the form of dividends or rent, but as the name suggests the real appeal of growth assets is the potential for their value to increase over time.

Thanks to the power of compounding, capital growth can really ramp up your wealth.

Table 1 shows that $10,000 invested in Aussie shares in mid-1993 would have grown to be worth $138,778 by the middle of 2023.

By contrast, $10,000 invested in cash in July 1993 would be worth just $34,737 three decades later.

Table 1 Growth of $10,000 invested from mid-1993 to mid-2023

Asset class

End value by mid-2023

30-year average annual return

Australian shares



International shares



Australian Listed property



Australian bonds






Assumes no acquisition costs or taxes and all income reinvested.

Source: Vanguard[1]

The catch is that ‘growth’ assets do not increase in value in a linear fashion. Expect upswings and downturns along the way.  

As an investor, it can be very rewarding to see the value of your shares climb higher. But you also need to be able to withstand a fall in the value of your investment – and be prepared to sit tight until markets recover. Quality assets invariably recoup lost ground after market falls, sometimes surprisingly quickly.

The ups and downs, or ‘volatility’, of growth assets reinforce the value of diversification. It’s a lot easier to sit out the tough times when another part of your portfolio is humming along nicely.


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Paul Clitheroe
Paul Clitheroe
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