Reference no: EM133035805
With three dependent children, the Brocks are assessing their life insurance. Pam has $5,000 of coverage. Josh has life insurance coverage equal to approximately eight times his annual salary.
With approximately 20 years until retirement, Pam and Josh Brock want to establish a more aggressive investment program to accumulate funds for their long-term financial needs. Josh does have a retirement program at work. This money, about $110,000, is invested in various conservative mutual funds. Since Pam has been working sporadically over this time frame, she does not have a formal retirement fund.
The Brocks established their own investment program about four years ago, and today they have about $36,000 invested in conservative stocks and mutual funds. In addition to their investment program, the Brocks have accumulated $11,000 to help pay for the children's college educations. Also, they have $5,000 tucked away in a savings account that serves as the family's emergency fund. Finally, both will qualify for Social Security when they reach retirement age.
1.) Describe an investment portfolio (asset types, allocation, risk-return) that you would recommend for the Brocks. Assuming a portfolio of 100%, how would you break out the investments by their weight (as a percentage)?
Use the Reference below to pull information from
Kapoor, J. R. (2021). Focus on Personal Finance (7th Edition). McGraw-Hill Higher Education (US)
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Life Situation
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Financial Data
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Pam, 43
Josh, 45
3 Children, ages 16, 14 and 11
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Monthly income
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$4,900
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Living expenses
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$4,450
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Assets
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$262,700
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Liabilities
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$84,600
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Emergency Fund
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$5,000
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