What is Investment Planning?

September 23, 2019

When it comes to creating the financial future that you want, there are a lot of elements to think about both personally and financially. Though this thought can make your financial situation seem overwhelming and unmanageable, instead think of it as a variety of assets that can help you reach your goals. One of those assets is investment planning. 

Today, on the Advisory Group West blog, we are going to discuss one of those crucial elements — investment planning. Keep reading to learn more, and visit the Advisory Group West website to learn about our unique approach to financial planning and to see all of the resources that we have that can benefit you. Also, be sure to schedule your Complimentary Cornerstone Vissions™ Strategy Session today with one of our personal financial advisors in Glendale!

Investment Planning Basics

To successfully reach your financial goals, it is important to be strategic about your investments. Investing for the sake of investing can be beneficial. However, when you invest thoughtfully, there is greater potential to actually reach your financial goals. 

An investment plan is a strategy that comprehensively takes into consideration your overall financial plan, your short and long-term goals, and utilizes a variety of investments for those end goals. 


Your particular investment plan will depend on your needs and so it will always be unique. However, when creating your financial plan your advisor will most likely consider: 

  • Risk tolerance
  • Diversification of assets
  • Asset allocation

All of these elements will be thought about with the end goal of maximizing your returns. What’s more, a sound investment plan should take into consideration periodic market volatility and the natural fluctuation that occurs as a result. 

When you set out to create an investment plan it is important to follow these basic steps. 

Set a Specific Goal

The best way to begin creating a solid plan is to set a specific goal. A specific goal will be dictated by your overall financial plan and will indicate a specific dollar amount. Usually, it will be dictated by how much you want to save for retirement. Investing in retirement planning can help you determine how much you want to save and how you will get there, as well as the timeframe.

Know What You Need to Save

Knowing exactly what you need currently and for your savings is important to determine your investment strategies. Also, knowing your current financial priorities (i.e. paying off debt, saving for retirement, etc.) will also play a part in determining the type of investment plan you will create.  

Choose An Investment Strategy

Once you know what your priorities are, you can choose a strategy. Often, some of the basic aspects to take into consideration include:

  • The level of aggressiveness  
  • The goals you are working for

In some cases, high-risk, aggressive investments are best for saving for long-term goals and low-risk investment for short-term goals. However, there isn’t always a need to choose one or the other — often a balanced investment plan — one with low and high risk investments can yield the best results. As your financial plan changes, you reach your goals, and the market environment changes, it may be a good idea to make changes to your strategy, and you would be right. An investment plan is made to be revisited, tweaked, and restructured as your needs change.  

Create an Investment Policy Statement

Once you reach this point and you have an understanding of what you need for your investment strategy, it can be a good idea to create an investment policy statement. This statement will act as a guideline for which all other decisions about your investments are made. An investment policy statement can include: 

  • Goals and objectives
  • Strategies to reach your goals
  • Return expectations
  • Time horizon
  • Risk threshold
  • Types of investments in your portfolio
  • Accessibility of your money generated by your investments
  • Specifying portfolio monitoring 
  • Specifications for when and why your portfolio should be rebalanced


The type of investment will differ from investor to investor. What you need to understand is: 

  • How an investment fits into your investment strategy — its purpose
  • Your asset mix 

When your financial advisor is assisting you to create your investment plan, they will also consider your asset mix. An asset mix defines where and how your assets are distributed in your portfolio. Assets are broken up into three main classes: 

  • Cash and cash equivalents
  • Fixed income
  • Equities

Cash and Cash Equivalents

Cash and cash equivalent assets are those that are cash or can be converted into cash quickly. Because their value can change, equity and stock holdings are not considered a cash equivalent asset. 

Fixed Income

Fixed income assets are anything that has fixed interest payments — meaning they are paid on a schedule, but the amount earned can vary. Bonds, ETFs, CDs, and money market funds are all considered fixed income assets. 


Equity assets are stocks and the value that would be given to a shareholder if the amount of money was returned to that shareholder. 

These asset types can work together to create an investment strategy that is productive and can help to take you closer to your overall financial goals. To create a viable investment plan that is working for you and not against you, it is best to invest in investment planning services that your local financial advisors can provide. Learn more about investment planning and the resources available to you in Glendale here.


When you hear all of these financial terms, it is easy to wonder just how different they really are. An investment plan and financial plan are similar. However, an investment plan only addresses one aspect of your financial plan — your investments. A financial plan addresses your financial situation as a whole and will take into consideration: 

  • Assets
  • Debts
  • Budget
  • Insurance 
  • Investment plan
  • Estate plan
  • Income taxes

At Advisory Group West, we deliver investment plans as part of a total financial planning solution. Like investment planning, a financial plan is flexible and can change over time to better fit your needs. 

Ready to Create a Cohesive Investment Plan?

Advisory Group West would love to work with you to create a cohesive investment plan as part of a financial plan to help you reach your financial goals. We work with a variety of clients in the Glendale area. However, we specialize in helping those who are nearing retirement reach retirement and stay in retirement. Learn more about the services we offer and the resources we can offer you on our website.