The foremost investment objective of a nest-egg is generally preserving capital, since it represents funds that have been accumulated over a considerable time to achieve a goal. However, the portfolio should also have a growth component to offset the effects of inflation over time. A nest egg should typically be invested in instruments which actually define the pathway to reach out the desired numbers .The exact allocation of the instruments within a nest- egg “theme” should be strictly based on asset allocation principles as well as the investor’s risk tolerance and comfort level.

It would be folly to invest nest egg proceeds in certain volatile investments in hopes of achieving a high rate of return. These investments include commodities, small-cap stocks and currencies, since their inherent volatility makes them less suited for goal based investing.