It seems like such a no-brainer, you should always have an investment objective before buying a stock, yet many investors completely disregard this all-important step. Planning ahead and setting an objective or a goal is commonplace in most tasks, so why so many investors avoid setting specific objectives is beyond me.
Given the volatility of the current day stock market planning ahead is more 
important than ever. By understanding what you are trying to get out of a certain investment ahead of time, an investor becomes more disciplined. Discipline is essential in a market that moves hundreds of points in just a few minutes at times.
Setting up investment plans and objectives allows an investor to gear his or her portfolio to their specific goals. For example, an investor who is looking to grow their portfolio over a period of 30 years will likely want to be quite aggressive, but an investor who needs that money within 3 years may well be looking for stocks with high dividends and large market caps.
Emotions can run high in the stock market, and frequent readers of GrowYourFunds know that I often stress the importance of leaving your emotions outside of your investment decisions. Planning ahead and having specific objectives will help you keep emotions out of the decision. For example, one who doesn't plan ahead with an investment objective is far more likely to never want to take profits in a stock that is doing well because he or she just loves watching it go higher. Investing requires no emotions and full discipline to maximize your returns.
The moral of the story here is that you should never overlook the first and most important step when it comes to investing your own money.
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