Capital appreciation or capital gain the increase in the price of an asset that you pocket when you sell it. As the chief decision-maker over your investments, you ll have to estimate what rate of return you will need to meet your savings goal. If you can accumulate most of what you ll need for the future by simply saving money, you can look for a lower rate of return, and therefore less risk. If you are counting on the investment results of your savings to make up a large portion of your resources, you will have to look to higher rates of return. As you move up the line, your return increases but so does your risk.
Many people choose their investments based in part on how they feel about specific issues.
You may wish to avoid companies or mutual funds that invest in certain countries, or avoid businesses with practices that go against your religious or social beliefs. Similarly, you may want to support companies or industries you believe in. This is your chance to vote with your investment dollars. However, keep in mind that this is your retirement account, and your primary goal should be to achieve financial security in retirement.