Portfolio ObjectivesThere are four different portfolio objectives that can correspond to a client's objectives. Before the client can find out what their portfolio objective is, they will need to ask themselves some very important questions. First of all, what is the objective of this portfolio? Is the client's goal to prepare for retirement, live through retirement, save for education, etc.? Another important consideration to take into account is the investment time horizon of this portfolio? Is the client investing for a short-term objective, a long-term objective and over how many years? Finally, the client will need to know their risk tolerance. How much risk are they willing to take when it comes to their investments? The first type of portfolio objective is capital stability. This type of investor has a very conservative risk tolerance. These types of investors are usually about to retire or are already retired. The purpose behind the stability of the main objective is to invest in investments that will not lose the amount invested by the client. This is the most conservative portfolio available and its growth is very low due to the conservative approach of the portfolio. This portfolio will generally not track inflation because it does not invest in market-linked securities that will promote growth. The types of investments the client will see in this portfolio will be short and long term CDs, short and long term bonds, and other fixed income securities. The second type of portfolio objective is an income portfolio. The type of investor who would be suited to this type of portfolio objective will have a risk tolerance of conservative to moderately conservative...... middle of paper ......tor will see investments within this portfolio such as stocks, mutual funds, an equity investment trust (EIT). The types of stocks will be growth-oriented stocks that may not pay dividends, such as Google. Overall, of the four portfolio objectives, capital stability, income, income growth and capital appreciation, there is one more. consideration that must be taken into account. This consideration concerns taxes. With income growth and capital appreciation portfolios, you won't have to pay taxes on the appreciation, only then the income that can be generated within like dividends paid. Whereas with stability of capital and income, taxes will generally be higher because more income will be generated. Of course, if these portfolios are part of a tax-sheltered vehicle, taxes can be deferred or even grow tax-free..