The goals-based investing framework is designed to maximize the probability of achieving our goals. This is a different objective than “maximizing our portfolio return” or “minimizing portfolio risk” and requires that we explicitly define, quantify, and prioritize our goals for all years in our investment time horizon. Once our goals are organized by priority and
Q3 2012
Creating a Financial Hierarchy of Needs Defining, quantifying, and prioritizing our financial goals are the first steps in the Goals-Based investing framework. This process is highly personal and unique to each family and even to each household and individual within that family. Nonetheless, three observations about human behavior tend to accurately describe all of us