Investment Portfolio Assignment example
Finance & Accounting
Pages 8 (2008 words)
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The Investor is a 47-year-oldmale who is looking to retire at age 67, the first year he is eligible for full social security benefits. He is a district sales manager for Bob Forsythe Auto, a large and highly profitable dealership in mid-Missouri.


He does receive a cost of living adjustment on an annual basis of 3.5%. His wife works part-time as a freelance photographer; however, her pay is considered supplemental income, as her workflow is not deemed steady enough to cover anything more than the car payments for their two teenage children, ages 17 and 16. Both children also have 529 plans established, gifted to them by their grandparents ten years ago. Therefore, college tuition is not considered a financial objective, as higher education will be essentially paid for through these particular savings plans. Finally, the investor has ten years left on a 30-year mortgage note, thereby paying off the loan ten years before he enters retirement. The monthly mortgage payment is approximately $1125. Since the couple looks at their residence as their dream home, they have no intentions of ever selling their property nor do they intend to purchase a second home. They do not foresee any other significant expenses on the horizon; however, they do have an emergency fund valued at $10,500 to cover any problems that may creep into their financial picture. It can be assumed, then, that their objective will not include constructing an emergency reserve. They can, and will, focus solely on retirement savings. I. Investment Policy: A study conducted by Klein and Iammartino in 2010 states that Modern Portfolio ...
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