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Suitability
Investment Objectives and Suitable Investments
Term | Definition |
---|---|
Long-Term Growth (Longer Horizon; Greater Volatility) | Common Stock, Growth Stock, ADR, Growth Fund, Stock Fund, Index Fund, Stock ETF |
Growth Income (Less Volatility; Reduced earnings) | Mix of stocks and bonds; Balanced Fund; Convertible Bond; REIT |
Income ( Least Volatility) | Income Fund: Bonds and Bond Funds; Preferred Stock: Utility Stock |
Safety ( Low Credit Risk) | U.S. Treasury; Agency Debt; Investment Grade Corporate and Municipal Debt |
Short-Term Capital Preservation (Money Market Instruments) | Money-market Mutual Funds; T-Bill; Bankers Acceptance: Commercial Paper; For Investors in a high tax bracket= Municipal Notes(BAN, RAN, etc.) |
Tax-Advantage Investments (High Tax Bracket) | Tax-Exempt Income= Municipal Bond Tax- Deferral= Annuities, IRA and Retirement Plans, Education Savings plans Tax Credits/ Deductions= DPPs/limited partnerships |
Aggressive Growth or Income( High Risk, High Reward) | High Yield Bond; Sector Fund; CMO support/companion; Wildcatting limited partnership; Raw Land Limited partnership; Small/micro-cap stocks and funds |
Speculation (Active, short-term speculation) | Option strategies, Leverage ETF. Short Stock positions |