Series 65: 5.2.1.1. Preservation Of Capital

5.2.1.1. Preservation of Capital

When clients are averse to any decline in the value of their investments, in the language of money, they want to “preserve their capital.” Only the most conservative investments will satisfy this goal. FDIC-insured bank CDs, U.S. Treasury securities, and money market mutual funds would all be acceptable recommendations. Any type of investment that puts the principal at risk is not acceptable to this type of investor. But with the safety of these investments comes lower returns, and clients should be made aware that their portfolio now faces purchasing power risk. In other words, the returns from their investments may not be able to keep up w