Objectives of investment: Definition and advantages

Investment properties are real estate assets purchased with the intention of generating income, such as rental properties or commercial buildings.
Objectives of investment
3 min

Investments are a great tool to increase your wealth. While it is true that savings are crucial, they may often be insufficient in helping you retain the time value of money or keep up with inflation. This is why investments are important. Investment, be it in property, stock market, bonds, or mutual funds, will empower your money to create further income. If you are interested in becoming an investor, the first step is to introspect and understand your objectives of investment.

In this article, we discuss what are the objectives of investment, and the benefits of investment and financial planning.


Objectives of an investment are determinants of your financial goals and strategy. Gaining an in-depth understanding of your personal and financial objectives is the first step to sound investment planning. Whether you take care of the investments yourself or hire an asset manager, your investment objectives would determine what the ideal portfolio for you should be. Some popular investment tools include term deposits (fixed deposit or recurring deposit), mutual funds, bonds, commodities markets, and real estate. An investor questionnaire could be a helpful tool if you are confused and lack direction. Based on your responses, the questionnaire will provide you with suggestions for your portfolio.

What are the objectives of investment

After the definition, it is time to explore the major objectives of investment that drive an investor in markets. Your unique goals could vary depending on your age, salary, and risk appetite. For instance, as a salaried professional, you may want to invest in developing an additional source of income through investing in the stock market. On the other hand, a retiree may want a more secure investment like government bonds. The objectives can be broadly categorised into income, risk tolerance, and capital development. Let us look at these one by one.


As an investor, your primary goal would be to derive consistent income from your investments. This is a popular choice among salaried professionals who want to invest to secure a stable income after retirement. If this sounds like you, your portfolio should include a diverse set of government securities, bonds, treasury bills, and a few reliable stocks in the market. Additionally, employee provident funds (EPFs) are set up to provide stability after retirement from the workforce. With knowledge of EPF management and how to transfer EPF online, you can stay on top of your investments and remain prepared for your golden years.

Risk tolerance

Another crucial objective that determines the direction of investments for all investors, to varying degrees, is risk tolerance. Everyone loves safety, but safe investments often come with the downside of very low to moderate returns. If you value safety above all else, secure investments in your portfolio could include term deposits, government bonds, and corporate bonds. Even though no investment would be completely risk-free, these instruments carry relatively less risk but offer lower returns.

On the other hand, certain corporate FDs, like the Bajaj Finance FD, offer lucrative interest rates of up to 8.85% per annum along with the highest stability ratings (ICRA AAA(Stable) and CRISIL AAA/STABLE), ensuring that your deposits are secured.

Also read: How to register EPF grievance online

Capital development or appreciation

In literal terms, you can only grow your capital by selling off assets. For example, let us assume you hold shares of company A. Now, even though you will be earning consistent returns through dividends, your capital will grow only with the sale of shares at a profit. If your objectives of investment are to multiply and grow your wealth, you can invest in stocks and mutual funds. Having a diverse portfolio of stocks for the long term will serve you well.

Advantages of planning investments

Here are five primary advantages of planning your investments while adhering to your personalised objectives to help you achieve your financial goals:

  • Stay disciplined: With clear objectives and a predetermined plan for your investments, you can stay on track, making steady progress towards your goals. A set target will help you stay motivated and disciplined in your efforts. Furthermore, a structured plan would also deter impulsive decisions.
  • Achieve goals faster: With specified long and short-term goals, you can consistently achieve your targets. What’s more, it will help you manage resources efficiently to focus on achieving your goals in a timely manner.
  • Track and manage progress effectively: A sound investment plan will enable you to track your progress at all times and make changes whenever necessary. Planning with the objectives of investment in mind would also help you recognise patterns and deficiencies and strengths and weaknesses to constantly analyse and improve your investment plan.
  • Minimise risk: Robust investment planning aims to create a plan according to your risk appetite and avoid unnecessary market risks. It also protects you from market fluctuations and helps you focus on building wealth.
  • Taxation benefits: Some investments are specifically targeted at helping investors save taxes. Several investment tools can be leveraged to reduce your tax burden, and a good investment plan will take this into account to help maximise your savings.


Comprehending the objectives of investment is vital for investors aiming to strengthen and safeguard their financial well-being. By understanding your investment objectives, you can customise your approach to fulfil your particular requirements, whether it involves generating income, handling risks, or expanding your wealth. Investing with well-defined aims not only provides guidance but also presents various benefits, such as disciplined wealth building, quicker goal attainment, efficient progress monitoring, risk management, and opportunities for tax savings. Thus, strategic investment planning, aligned with personal objectives of investment, serves as a blueprint for achieving financial prosperity and stability.

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As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.