Financial Goals and Objectives

What this video covers

• Why establishing goals is the mandatory first step before any recommendation, and what makes a goal specific, measurable, and time-bound
• The four primary investment objectives (current income, capital appreciation, capital preservation, speculation) and the typical client and example investments for each
• Why current-income investors knowingly sacrifice long-term growth, and which products (bonds, dividend-paying stocks, real estate investment trusts (REITs)) deliver that cash flow
• Which products fit capital preservation: Treasury securities, money market funds, and certificates of deposit (CDs)
• Why speculation can be suitable when the client has the resources, experience, and willingness to absorb a total loss, and when it absolutely is not
• The exam distinction between capital appreciation (measured risk, long-term gains) and speculation (outsized risk, short-term profit)
• How to handle a client with multiple simultaneous objectives by allocating different portions of the portfolio to each goal and time horizon