Hello my professional friends. Welcome to my third article. There are several strategies to navigate and play around with the risk. What I want to share in this article is how to invest based on time horizon.

First part – Set your investment objectives. Investment objective is the goal of your investment. Some of actual examples are house, car, holiday trip, marriage reception, pension.
Second part – Time horizon is the total time you want your objective to materialize.

The reasons why putting up your list is very important:

1. Time horizon determines how much risk we can take.
2. You can see the whole list of your goals. You can reassess which ones are feasible. Prioritize which ones you want to achieve.

Follow these steps on how to start investing to achieve your financial life goals:

1. Divide all your goals into 3 sub-lists: List A for goals within 1 year. List B within 1-5 years. List C within 5-10 years.
2. Set aside a portion of your net income per month for all of these goals. Distribute the amount into 3 parts respectively for 3 lists.
3. Pick products to pair with your goals. For easier management I suggest pick 1 product for 1 specific goal.
4. Do not think too complicated. What is more difficult is to start doing.

Below I will give example of final list in simple details. Please note that example below only takes time horizon factor. I will talk about other things to consider in my future articles. Thanks for reading and invest right away.

Monthly sum investment: 10,000,000

1. List A – 1 year goals – invest in money market mutual funds (MMMF):
   • New smartphone – MMMF A – 1,000,000
   • Camera – MMMF B – 1,000,000
2. List B – 2 to 5 years goals – invest in fixed income mutual funds (FIMF):
   • MBA tuition fee – FIMF C – 2,000,000
   • Euro trip – FIMF D – 1,000,000
3. List C – 5 to 10 years goals – invest in stock mutual funds (SMF):
   • Housing down payment – SMF E – 3,000,000
   • Pension fund – SMF F – 2,000,000

Morgan Perdana