What is the right investment strategy for me?

An income account and a growth account are two different investment strategies that investors can use based on their financial goals and risk tolerance. Here’s an overview of the differences between these two types of accounts:

Income Account: An income account, also known as an income-oriented or dividend-focused account, looks to provide investors with a steady stream of income. The primary objective of an income account is to generate income, as opposed to focusing on capital appreciation. Investors typically look for investments that offer consistent dividends, interest payments, or other income.  Income-generating assets include bonds, dividend-paying stocks, real estate investment trusts (REITs), and some mutual funds or exchange-traded funds (ETFs). Income accounts are generally favored by individuals who rely on the investment income to help cover their living expenses, such as retirees or conservative investors seeking stable returns.

Growth Account: A growth account, also referred to as a capital appreciation account, focuses on long-term growth potential and looks to increase the value of the investment over time. In a growth account, investors prioritize capital gains as opposed to dividend or other income. The focus is on investing in assets that have the potential for higher returns, even if they may not generate immediate income. Growth-oriented investments typically include stocks of companies with strong growth prospects, emerging market equities, technology companies, and other sectors with potential for expansion. Growth accounts are commonly favored by individuals with longer investment timelines, higher risk tolerance, and those who are seeking to accumulate wealth over time.

Key Differences:


  • Income accounts primary objective is to generate income.
  • Growth accounts focus on capital appreciation and long-term growth potential.



  • Income accounts tend to invest in assets that provide steady income, such as bonds, dividend stocks, and REITs.
  • Growth accounts typically invest in assets with higher growth potential, such as growth stocks or emerging market equities.


Risk and Return

  •  Income accounts generally have lower volatility and lower potential for capital appreciation compared to growth accounts.
  •  Growth accounts may experience more significant fluctuations in value but also offer the potential for higher returns over the long run.


Investor Profile:

  •  Income accounts are often preferred by conservative investors seeking stable income or retirees relying on investment income.
  •  Growth accounts are favored by investors with longer investment horizons, higher risk tolerance, and a focus on wealth accumulation.

It’s worth noting that these types of account need not be mutually exclusive.  Many investors find that a mix of the two provides better coverage of their investing objectives.  A Sara-Bay Financial advisor would be happy to help you investigate which path may be best for you and your risk tolerance and investment objectives.


The information in this article is a compilation pulled from a variety of sources.  The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.


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