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Investing wisely is a function of your specific needs and goals. Each investor has different objectives that need to be met depending on age, income, planned activities, and attitudes about risk. Among the important factors to consider are personal status, plans, and constraints. Some of the issues that you should consider in defining the objectives that are right for you are listed below.

1. Time Horizon: An important consideration in setting investment objective is your time horizon. When do you expect to liquidate a portfolio? Should you choose assets of short or long maturity?

2. Tolerance for Risk: Your tolerance for risk is a very personal decision, and a question that is difficult for many investors to answer. In general, markets tend to provide higher returns in exchange for baring higher risk. It is important to be honest with yourself in assessing whether you are comfortable with market volatility, and the level you can tolerate.

3. Income: Both your absolute income level and your income requirements influence your investment objectives in several ways. First, income, like age, influences the choi8ce between dividend-paying or interest-paying investments, and those whose primary return is in the form of capital gains. Your income level also affects your investment choices because it determines your tax rate. Low-tax-bracket investors will be more likely to prefer income-producing investments.

Income also may influence risk preferences. High-income investors may be more willing to choose higher risk investments since they can more easily contribute  additional investment capital.

4. Goals and Needs: You may have specific goals and requirements that you want your investment portfolio to fulfill. For example, you may be funding college for children, business expansion, travel plans, or retirement needs. You should identify these goals and needs clearly.

5. Age: Your age is an important consideration when deciding how much risk to assume. Portfolio assets that are riskier and that will fluctuate more over time may be appropriated for younger investors but not for others.

Age also affects the choice between income-earning securities and those oriented toward capital gains. An investors who is employed and near peak earning power will probably wnat to minimize paying taxes, and will therefore lean toward investments that do not provide current income.

6. Taxes: Your after-tax return is the return that matters. This will determine whether you should seek tax exempt or tax-sheltered securities as a part of your portfolio. If you have tax-qualifies or tax-deferred assets, such as IRA rollovers and 401 (k) plans in the US or RRSPs and RRIFs in Canada, you should hold these as separate portfolios which will likely carry different investment objectives.

7. Occupation: Your occupation also can affect portfolio objectives. Some professions produce more stable incomes than others, enabling the investors to tolerate more investment fluctuations. Your profession also may determine other assets. For example, does your job provide an adequate retirement plan, or must you fund your retirement from your investment portfolio?

8. Wealth: Investment objectives should take into consideration the assets you hold outside the portfolio. For example, if you have substantial equity in your home, you may want to minimize real estate holdings in your financial assets, or you may need to consider a different type of real estate asset. If you hold illiquid assets, then new investments may emphasize liquidity.

9. Liquidity: Liquidity is the ease with which you can convert your assets to cash at fair market value. It is essential that you recognize the need to convert your assets into cash at the appropriate times.

10. Other Special Circumstances: Consider here any special needs, goals, or problems you have not already addressed.