INVESTMENT OBJECTIVES AND RISK TOLERANCE

Have you ever looked at the first page of your statement and wondered what the "Investment Objective" and "Risk Tolerance" means? All investors have objectives or goals, such as seeking income, growth and income, growth, or trading/speculating. All investors also have a risk tolerance, which is the amount of risk of loss they are willing and able to tolerate in order to seek their investment goals. And, as an investor, you have chosen the Investment Objective and Risk Tolerance as it appears on your statement. Although all investments involve risk, including the potential loss of principal, some securities, such as equities, among others, involve more risks than other securities. Higher risk investments may have the potential for higher returns, but also have the potential for greater losses. The higher an investor’s risk tolerance, the more they may invest in higher risk securities offering the potential for greater returns.

Generally speaking, investment objectives span a spectrum with "Income" investors generally having the least amount of higher risk investments in their accounts and "Trading and Speculation" investors having the highest amount of higher risk investments in their accounts. Similarly, risk tolerances are on a ladder that starts with "Conservative" and moves to "Moderate," then "Long-Term," and finally "Trading/Speculating." At each step, an investor is willing to accept more risk than an investor who is on the rung below.

For example, a client with a "Long Term" risk tolerance accepts the short-term market volatility associated with a large proportion of higher risk investments because he or she has a long-term time horizon and seeks the higher long-term return potential associated with these higher risk investments. Please note that our firm currently uses the word "Aggressive" to denote this type of risk tolerance, but we will be changing this risk tolerance description to "Long Term" in the coming months. Your statement will reflect this modification if you have this type of risk tolerance.

Below are descriptions of the combined Investment Objective and Risk Tolerance, listed in order of least aggressive to most aggressive for both the Investment Objective and Risk Tolerance categories.

Investment Objective: Income
Income investors seek a maximum amount of income given their risk tolerance, and are willing to forgo capital appreciation and growth of income in order to seek a higher level of current income.

• Risk Tolerance Conservative: Conservative Income investors seek the maximum amount of income consistent with a modest degree of risk. They are willing to accept a lower level of income in exchange for lower risk. Equities and high-yield bonds will typically not be a large percentage of the account.
• Risk Tolerance Moderate: Moderate Income investors seek to balance potential risk with increased income potential. Equities and high-yield bonds will typically be some percentage of the account.
• Risk Tolerance Long Term: Long Term Income investors seek a significant level of income, and, due to their long term time horizon or other factors, they employ higher risk, more aggressive strategies that may offer higher potential income. Equities and high-yield bonds may be a significant percentage of the account.

Investment Objective: Growth and Income
Growth and Income investors seek current income, but also seek income and capital growth over time. These investors are willing to forgo a portion of current income in order to provide for potential future growth.

• Risk Tolerance Conservative: Conservative Growth and Income investors seek the maximum growth and income consistent with a relatively modest degree of risk. They are willing to accept lower potential returns in exchange for lower risk. Equities will typically be some percentage of the account, and will typically pay dividends.
• Risk Tolerance Moderate: Moderate Growth and Income investors seek to balance potential risk with higher potential growth and income. Equities are typically a significant portion of the account, and will typically pay dividends.
• Risk Tolerance Long Term: Long Term Growth and Income investors seek a significant level of growth and income, and their long-term time horizon and/or other factors allow them to pursue higher risk, more aggressive strategies that may offer higher potential returns. Equities are typically the primary asset in the account, and will typically pay dividends.

Investment Objective: Growth
Growth investors do not seek account income and their primary objective is capital appreciation.

• Risk Tolerance Conservative: Conservative Growth investors seek maximum growth consistent with a relatively modest degree of risk. They are willing to accept lower potential returns in exchange for lower risk. Equities will typically be a significant portion of the account.
• Risk Tolerance Moderate: Moderate Growth investors seek to balance potential risk with their goal of higher potential growth. Equities are typically the primary asset in the account.
• Risk Tolerance Long Term: Long Term Growth investors seek a significant level of growth, and due to their long-term time horizon or other factors, they employ higher risk, more aggressive strategies that may offer higher potential returns. Equities may be as much as 100% of the account.

Investment Objective: Trading & Speculation
Trading and Speculation investors seek out maximum return through a broad range of investment strategies, which generally involve a high level of risk, including the potential for significant loss of principal.

If you feel that your current Investment Objective or Risk Tolerance is not right for you — or if your statement is not displaying this information — please contact your Financial Advisor to discuss which choices are right for you.

Wachovia Securities is the trade name used by two separate, registered broker-dealers and non-bank affiliates of Wachovia Corporation providing certain retail securities brokerage services: Wachovia Securities, LLC, Member NYSE/SIPC, and Wachovia Securities Financial Network, LLC, Member FINRA /SIPC.

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