Series 65: 5.2.1.3. Capital Growth

5.2.1.3. Capital Growth

An investor who seeks capital growth wants to increase the value of his investment over time. To do this, the investor must be willing to take risk and accept volatility in the value of his investments. Stocks are considered the best recommendation for an investor who wants to grow his principal. Over time, stocks produce higher returns than other investments. An equity investor is essentially participating in the business, albeit passively. By taking the risk and uncertainty that comes with being an owner of a business—some businesses do well, some do so-so, and some fail—equity investors are able to reap the long-term financial rewards that come with business ownership. Again, this is only appropriate for