Series 6

By Investopedia AAA

Evaluation of Customers - Investment Objectives

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

You May Also Like

Related Articles
  1. Investing Basics

    Online Portfolio Management, DIY or ...

  2. Insurance

    Municipal Bond Tips For The Series 7 ...

  3. Retirement

    6 Proven Tips For Series 6 Success

  4. Insurance

    Tips For Passing The Series 6 Exam

  5. Professionals

    Banker Or Broker: Which Career Is Right ...

Trading Center