Investment Planning

2022 CFPⓇ Board Principal Knowledge Topics and Learning Objectives

• Describe and compare the characteristics, including risk and return, of all asset classes including cash equivalent securities, individual bonds and stocks, real estate, other tangible assets, all pooled asset categories and derivatives. (D.27.a)
• Identify, measure, and differentiate between types of investment risks including systematic, unsystematic risk, interest-rate risk, liquidity risk, credit risk, inflation risk, operating and financial risk, reinvestment-rate risk, exchange-rate risk and political risk in a client’s portfolio. (D.28.a.)
• Measure and interpret investment returns including after-tax return, holding period return, effective annual rate, annual percentage rate, time- and dollar- weighted returns, geometric and arithmetic returns. (D.30.f)
• Construct an optimal client portfolio by the allocation of wealth amongst risky assets and the risk-free security. (D.31.a)
• Value a bond using discounted cash flow and explain how interest rates affect bond values (D.32.a) and estimate the value of a stock using discounted cash flow, the CAPM and price multiples (D.32.b)
• Construct a tax-efficient diversified portfolio meeting the goals, risk preferences and time horizon of a client. (D.33.e)
• Explain and apply investment strategies such as buy-and-hold, immunization, core and satellite, passive (indexed) and active management techniques such as tactical allocation, market timing, Environmental, Social, and Corporate Governance (ESG) investing, sector rotation, etc. (D.34.a)
• Define and describe what qualifies as an alternative investment (e.g., cryptocurrency, precious metals, etc.). (D.35.a)

The complete CFPⓇ Certification Learning Objectives, for this and other CFPⓇ courses, may be reviewed [HERE](https://www.cfp.net/-/media/files/cfp-board/cfp-certification/2021-practice-analysis/2021-cfp-certification-learning-objectives.pdf).