Investment Objectives
Preservation of capital, income, growth, growth and income, speculation.
What is Investment Objectives?
Preservation of capital puts safety of principal first (Treasuries, CDs, money markets). Income seeks current cash flow (bonds, preferred, dividend stocks). Growth (capital appreciation) seeks long-term increase in value. Growth and income blends the two. Speculation accepts high risk for high potential return. Liquidity is a constraint as much as an objective.
Investment Objectives: a worked example
A retiree needing monthly cash has an income objective; a 30-year-old saving for retirement has a growth objective.
More terms in Clients, Strategy & Tax
Sole Proprietorship
A business owned by one person with no legal separation from the owner.
General Partnership
Co-owners share management and unlimited liability; income passes through.
Limited Liability Company (LLC)
Limited liability for owners with pass-through taxation by default.
C Corporation
A separate taxpayer - profits taxed at the corporate level, then again as dividends.
S Corporation
A corporation that passes income through to shareholders, avoiding double tax.
Trust & Estate Accounts
Accounts run by a fiduciary - a trustee or an executor - under a governing document.
Foundations & Charities
Tax-exempt organizations investing for a mission, often in perpetuity.
Client Profile & Data Gathering
The financial and nonfinancial facts every recommendation must rest on.