Buying individual corporate stocks

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Reference no: EM133596316

Question

Jamie Lee and Ross are in their late 40s and their twins are about to start college. They have been researching the best way to invest their recent $50,000 inheritance. They are concerned that buying individual corporate stocks might be too risky, as they don't want to 'put all of their eggs in one basket. When speaking to a professional investment advisor, it was suggested to them that mutual funds might be the best choice to reduce that risk, as they would be investing in a variety of securities chosen by a professional fund manager. They are looking for a mutual fund that will provide both growth and income while maintaining a moderate risk since they still have some time before retirement. Current Financial Situation Assets (combined): Checking account: $7,500 Savings account: $83,000 (includes the $50,000 inheritance) Emergency fund savings account: $45,000 House: $410,000 IRA Balance: $78,000 Life insurance cash value: $110,000 Investments (stock, bonds): $230,000 Car: $18,500 (Jamie) and $24,000 (Ross) Liabilities (combined): Mortgage Balance: $73,000 Annual Income: Jamie Lee: $45,000 gross ($31,500 net after taxes) Ross: 135,000 gross ($97,200 net after taxes) Monthly Expenses (combined): Mortgage: $1,225 Property Taxes: $500 Homeowner's insurance: $300 IRA Contribution: $300 Utilities: $550

Reference no: EM133596316

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