When it comes to investing, each individual has unique needs and diverse financial objectives. Recently, we already shared that the answer to whether a savings portfolio or a target portfolio is better depends mainly on the horizon and objective of each investor.
To illustrate this, we present real case stories, changing names to preserve privacy, that explore the transition from a savings portfolio to a target portfolio.
Laia: the Emergency Fund that is maintained
The case of “The Million Dollar Wallet” is well known at inbestMe, since we comment on its evolution periodically. In this case, Laia (real name, daughter of the CEO) has some of her money in a savings portfolio, and she has no doubt that she should keep it as she is, since she is her emergency fund. For her, in this part of her money, immediate liquidity and security are key, it is an extension of her checking account. Despite seeking profitability, she values immediate access to these funds (available in 5 business days) for unforeseen events, without additional risks or withdrawal penalties, making the Savings Portfolio the ideal option.
Additionally, Laia has the most important part of her money in a very long-term retirement-oriented Portfolio (which she calls “my financial independence”) with profile 8 to which she makes a monthly recurring contribution. It’s her personal ”FIRE” wallet.
Maite: Moves part to a Target Portfolio
Maite was one of the first to open a Savings Portfolio at inbestMe and has accumulated a return of 4%. She had the objective of buying an apartment and wanted to be available in case a suitable opportunity arose. Now, she has decided to move half of her savings portfolio into a Target Portfolio maturing in April 2026.
Currently undecided about buying the apartment, Maite is sure that she will not need half of these funds in the next two years, so she has chosen to transfer them to ensure a cumulative target return of approximately 7.6% (3.7% annualized).
She has been able to do the transfer without a tax toll, since we use transferable funds in both portfolios.
Maite has several portfolios with different horizons and different risks.
Andrés: Prefer Flexibility with a Savings Portfolio
Andres has recently opened a savings portfolio and, since he does not have a defined time horizon, he prefers to maintain flexibility. This is another interesting use case for the Savings Portfolio. Until he can better define his goals and horizon, he prefers to avoid committing his money to a target date, even though he may lose some return.
Olga: start investing thanks to inbestMe
Olga has never invested. However, after her happy experience with her savings portfolio, she has come to understand that the money in her current account is losing value and that it is worth investing in one way or another. She has decided that she can continue on her way to becoming an investor (with her first €5,000 only 10% of her financial wealth) with a target portfolio maturing in December 2027 that she has come to understand has very little risk at maturity.
This allows you to better understand your risk tolerance. Although the Target Portfolio may experience fluctuations, they will be controlled (as shown by the convex cone-shaped graph illustrating the return scenarios), and at maturity, your capital will be protected by robust diversification, ensuring a return close to target.
You see it as a way to experience how it feels to take on some additional risk (since the return is not assured), but with the peace of mind that your investment will be somewhat protected: you know that near maturity volatility will tend to decrease.
Pedro: Savings to Buy an Apartment
Pedro’s goal is to buy an apartment in three years. His horizon is very well-defined (month up, month down). With the 12/2026 target portfolio, he has found a way to lock in an interesting return and prefers to insure it against a possible drop in rates that could reduce the performance of his savings portfolio, which varies according to central banks’ decisions. He thus sets a cumulative target return of close to 12%, which will help him to maximize the amount for the entry of his apartment.
Jordi: Goal replace his car
Jordi is very structured with his goals and likes to keep them well separated. He had in his Savings Portfolio his safety fund plus an additional amount that has a 2-year target, to buy a car. Jordi considers the purchase of a car an expense he would like to avoid, but having a large family at certain times he cannot do without it. He has mobilized part of his portfolio towards a target portfolio 4/2026 to accumulate the necessary money after selling his current car (it is already more than 10 years old, and he knows he will get very little for it, so he wants to make the most of its useful life). He has made some calculations of how much he has to put in addition to ensure a minimum down payment. This strategy allows him to ensure that he does not take additional risks in this part of his wealth that already has a very definite destination, keeping his goal clear, setting a return and measuring his progress over time to have his input for his car that he wants this time, yes, to be electric.
Jordi has several investment portfolios with different objectives, horizons and themes, a portfolio of SRI pension plans and portfolios for his children.
Juan: Objective generation of income with staggered maturities
Juan’s case is very different from all the others. Juan has recently retired and has started collecting his pension. In addition to the social security pension, added to that of his individual pension plan, he has calculated that he will need to generate more income to maintain a certain standard of living. He had established an important emergency fund to be able to plan his retirement with all the information and with peace of mind. He now has a clearer picture of the situation and has established three Target Portfolios with Staggered Maturities in 2025, 2026 and 2027, which will generate a complementary annual income. After each maturity, he plans to transfer the accumulated profitability as annual income to his current account and the capital will be invested at the next maturity, maintaining an income generation system with staggered maturities. He has read that inbestMe will provide him with this functionality a month before the expiration, therefore, he has time to mature it and refine his calculations. In this way, while he generates more or less stable income, he is minimizing the interest rate risk.
Juan has several investment portfolios with inbestMe, including a personalized advanced portfolio and his pension plan.
Maria: bond portfolio for the expert opportunist
María has been investing for years. She believes that a new era has opened for bonds (fixed income) after the change in the monetary cycle and the new interest rate situation. As inbestMe also announced the new daring bond portfolio, her reflection has gone further and has led her to open one when seeing the Yield of 4.5%. As he has some experience investing and believes that official rates will soon begin to fall, he hopes to benefit in both ways: on the one hand, from a yield that is in itself very attractive (4.5% has not been seen for many years), and On the other hand, adding a revaluation due to the drop in rates thanks to the inverse relationship between interest rates and bond prices.
Maria has other portfolios in inbestMe with more risky investments and considers this portfolio as opportunistic (fixed income offers right now a difficult situation to beat in the risk/return ratio) but also complementary. As an experienced investor, she knows that investing takes time and has portfolios for her children as well, with their future in mind.
Select your portfolio: a decision based on your objectives
Beyond opportunistic decisions, as we have seen, each case reflects different perspectives and financial needs. The importance of defining clear objectives and understanding the purpose of each investment is critical to making informed decisions on the most appropriate portfolio and helping us meet our financial and life goals.
