Is our primary objective short-term earnings or long term equity growth?
An investment that provides higher returns may not grow as much in equity. For example, a stock with relatively high dividend income may not increase significantly in its par value. Conversely, a piece of real estate may not provide much rental income, but over time may increase greatly in value and could be sold at great profit. Organizations with large portfolios will want a diverse portfolio that balances investment types; other organizations may choose different objectives as their program plans and cash needs change.
