return objective

when do you state the return objective in numeric terms? when do you just write a general statement like “xxx needs to pursue to total return strategy that focuses both on capital preservation and growth”

I think you “always” need to state a return objective if data is provided to be able to calculate one. If no data is provided then you probably do not.

Look at the past exams. I think they all have a seperate answer for the numeric required return. If there is no specific question, then I’m following bigwilly’s advice.

it depends on investor goals/life style needs, both primary and secondary. total return strategy might apply to majority of investors with relatively long horizon, low liquidity needs, and some flexibility in taking risks. asset allocation approach applies. tossing around some numeric numbers (investable asset, inflation-adjusted expenses, income tax vs capital gain tax, etc) will help. for other investors, income overweights growth. they like to minimize risk in absolute sense. advisor would need to find out how long the investment would last. there are also investors, their lifestyle protection asks for insurance type of strategy, or fixed planning horizen insured strategy. then return objective needs to be crafted along that line (probability of not meeting the goal would be a far more important number). focusing on both life-cycle investing and goal-based investing might help one to come up some mechanics to nail these type of questions. i guess this is also what cfai is looking for.