The basic objective of investment is to earn the maximum after-tax rate of return on the funds available for investment.
However, the rate of return shouldn’t be the only consideration.
It must also be consistent with the person’s investment objectives, as well as the investment constraints under which he or she must operate.
3 Main Investment Objectives
Income – Income-oriented investors are more concerned about current income than capital appreciation, while the reverse is true for the growth-oriented investors.
Growth – Growth-oriented investors tend to take a longer-term view. For example, they have a longer time horizon and target capital appreciation rather than short-term income.
Capital Preservation – Investors who focus on capital preservation tend to place greater emphasis on diversifying their portfolio in order to reduce risk, while maintaining their purchasing power. They tend to favor investments that are capital guaranteed and are very high quality fixed-income investments.
So What Is Your Primary Investment Objective?
Are you focused on income, growth, or capital preservation?
If you are unsure what investment objective to focus on, please consult your trusted FLA Organization Financial Planner for more information today.
