This assignment is to create a portfolio for a 45 year old divorced investor with one child age 12. The client will
need to pay $20000 a year (PV) for 4 years of college starting in 6 years.
Your client owns a web design firm with 8 employees. Business is currently good but can be uncertain at times. The business
almost closed in 2009 when the economy went into a recession.
Your client %u2013
Has $250000 in a qualified retirement plan that is currently in cash.
Has $250000 in large cap mutual funds that she inherited from her parents.
Plans to add $1000 a month to both the retirement and non retirement accounts.
Has a moderate risk tolerance and little investment experience.
She hopes to retire at age 65 and travel.
Be sure to explain %u2013
Your investment philosophy for the client while working and any changes that you recommend once she retires and begins to draw income.
How you plan to allocate and diversify the portfolio.
The specific investments you recommend. You can use mutual funds exchange traded funds and/or individual stocks in the portfolio.
How you plan to manage risk the expected standard deviation and correlation of the portfolio.
Based on the 3 and 5 year returns of the investments you select what should the client expect for a rate of return on the portfolio while
working and once retired.
How much money the client will be able to withdraw from the portfolio beginning at age 65 and how long you expect the money to last.