Setting Goals and Prioritization

Setting Goals and Prioritization

Portfolio management is a critical business process that involves managing an organization’s portfolio of projects and investments. Setting goals and prioritization are two key components of portfolio management that help organizations achieve their objectives and optimize their resources.

Setting goals involves defining specific, measurable, achievable, relevant, and time-bound (SMART) objectives that an organization aims to achieve through its portfolio of projects. These goals should align with the organization’s overall strategy and be consistent with its vision and values. Setting clear goals helps organizations focus their efforts and resources on the most important initiatives and prioritize their portfolio accordingly.

Prioritization is the process of determining the relative importance of different initiatives in an organization’s portfolio. It involves evaluating each initiative based on factors such as strategic alignment, resource requirements, risk, and potential benefits, and ranking them in order of priority. Prioritization helps organizations allocate their resources effectively and ensure that their portfolio is aligned with their overall goals and strategy. By prioritizing their portfolio, organizations can maximize their return on investment and achieve their objectives more efficiently.

Setting goals according to the client in the wealth management process is most crucial as it is what the manager’s plan is based on. The goal may be tangible or intangible in nature and these goals often vary from individual to individual at the various stages of life. The following are different types of goals.

• Short-term High Priority Goals: These are the goals that comprise needs that have to be met on a short term basis such as having savings for improvement of one’s qualifications or for a housing loan. Here, the individual has a high emotional involvement with the achievement of his goals as there are limited resources and cost of non-achievement is high.
• Long-term High Priority Goals: The goals here are stretched over a longer period of time such as planning for the higher education of a new born child, or planning for retirement. Because the goals are long-term, investments are generally made in risky assets of long maturity.
• Lower Priority Goals: These are goals that one may aspire to have if an opportunity presents itself. Examples of low priority goals are travel to foreign countries, living in a posh locality, owning a luxury car etc.
• Moneymaking Goals: When one’s goals are set to a point beyond the basic economic comfort, the individual pursues avenues to acquire substantial wealth. These individual generally have a high tolerance for risk and invest into one project and monitor and harvest the returns. For example, a person may invest in an upcoming company and wait till the company grows.