This section refers to general investment objectives, not the client's specific needs such as retirement at a certain age or college plans for his/her children (see the next section on capital needs). However, there is certainly a correlation between the two, and it is useful to know the characteristics of each of these investment goals:

  • Preservation of capital - the investor is more concerned with safety than return. Treasury bills and money market funds may be most appropriate.

  • Current income- the investor needs a portfolio that produces steady income for current living expenses. Bonds, annuities, and stocks with high dividends (such as utility stocks) may be appropriate.

  • Tax-exempt income - the investor's

  • Growth and income - the investor is looking for a portfolio that generates some amount of income, but he/she is looking for capital appreciation as well (often for protection against inflation). Appropriate investments could include a mix of bonds and stocks.

  • Capital appreciation - the investor's goal is likely retirement or another event in the future, where growth is required and current income is not needed. A diversified stock or mutual fund portfolio is appropriate.

  • Aggressive growth - the investor is looking for high-risk investments with a potential for very large returns. This is rarely the goal for an entire portfolio, but rather for a specific portion of assets. Aggressive growth funds and small-cap issues may be most appropriate.


FINRA Conduct Rule 2310

Related Articles
  1. Investing

    Every Investment Has a Tradeoff

    Every investment is a vehicle for safety, income or growth; but many times, the success of one objective comes at the expense of another.
  2. Tech

    What Does an Ideal Retirement Portfolio Look Like?

    The "ideal" retirement portfolio can differ from one investor to another, but some themes hold true no matter what.
  3. Retirement

    How To Create An Effective Retirement Income Strategy

    We will design a portfolio that should balance the requirements of liberal income with sufficient liquidity to withstand down markets.
  4. Retirement

    3 Mutual Funds That Are Top Bets for Retirement in 2016

    Find out which three mutual funds offer the best combination of consistent performance and low cost for your retirement income portfolio in 2016.
  5. Managing Wealth

    Using Time Horizons In Investing

    Time-horizon investing is all about planning. You need to think about your goals and select investments based on the amount of time you have until the goal must be funded.
Frequently Asked Questions
  1. What are the Differences Among a Real Estate Agent, a broker and a Realtor?

    Learn how agents, realtors, and brokers are often considered the same, but in reality, these real estate positions have different ...
  2. What is the difference between amortization and depreciation?

    Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally ...
  3. Which is better, a fixed or variable rate loan?

    A variable interest rate loan is a loan in which the interest rate charged on the outstanding balance varies as market interest ...
  4. What is the 1003 mortgage application form?

    Learn about the 1003 mortgage application form, what information it requires and why this form is the industry standard for ...
Trading Center