Properties to select suitable materials for making permanent magnets I have read that soft iron is suitable for making  a permanent magnet. Because it is required for permanent magnet to have high coercivity and high retentivity.
Same text also said earlier that soft iron has low coercivity and low retentivity and is very useful in making solenoids cores. 
What is the actual answer and also the reason?
 A: When you want to make a solenoid core, you are typically interested in a material which exhibits low eddy current losses (eddy currents are induced during a change in field, and they result in heating / losses in the core - this is almost never desirable except in the case of induction heating), and with high permeability - the latter enhances the magnetic field. Finally, you want high saturation: to be able to make a strong magnetic field, you want the material to remain linear (the more the atoms align in the field, the stronger the over all induced field becomes).
The second and third of these reasons make soft iron a good material for DC electromagnets: you can get a very high field from them. However, the conductivity of soft iron results in eddy current heating when it is used in an AC application - for example transformers. For this reason, it is usually laminated (cut into thin slabs or lamina which are electrically insulated from each other). This makes it harder to set up eddy currents, and limits the heating.
For permanent magnets, you are mostly interested in the remanence: how much magnetic field remains when you remove the driving magnetic force (usually an electromagnet). The coercivity tells you how much (reverse) magnetic field would have to be applied to demagnetize the material. So the former says "how strong can be magnet become", and the latter says "what will stop it being a magnet". A third consideration with some permanent magnet applications is their mass - so you might be interested in these properties as a function of mass.
For permanent magnets, Samarium Cobalt ( $ {Sm_2Co_{17}}$ ) and Neodymium Iron Boride ($ Nd_2Fe_{14}B $) are among the strongest. They are called "magnetically hard" because of their high remanence and coercivity. You would not want to use them in transformers etc. because there you need the induced flux to follow the current. The hysteresis in their magnetization curve would give rise to excessive heating during each magnetization cycle.
The difference is probably best explained with this picture: from ttp://www.daviddarling.info/images/types_of_hysteresis_loop.jpg

The larger area under the red curve shows that the material holds its magnetization well - but also that a lot of work has to be done to change the direction of the field. By contrast the blue curve shows that soft iron doesn't need a large applied field to lose its magnetization - its coercivity (the horizontal width of the curve at Y=0) is low.
A: Soft iron has a high retentivity (or remanence) but a low coercivity. Therefore it is not a suitable material for making permanent magnets
