Financial Education

Investment return objectives should be consistent with established risk objectives. How the return objective will be measured (typically total return) is important. Will it be on a pre-tax or after-tax basis? In real (inflation-adjusted) or nominal terms?

Return objectives depend both on how much is desired and how much is required in order to meet investor objectives. Once these levels are established, a specific risk objective (i.e. “average annual after-tax returns of at least five percent”) can be established.

For more information, see all articles on: Active Management, Asset Allocation, Portfolio Management

See also:

Investment Objectives

Forming an Investment Risk Objective

Investment Objectives and Constraints for Banks

Investment Objectives and Constraints for Endowments

Risk and Return in Strategic Asset Allocation