How long will the investor have before reaching retirement

Assignment Help Finance Basics

Reference no: EM133291112

The purpose of this exercise is to apply the thinking behind how to pick an asset allocation appropriate for different investors. The appropriate asset allocation considers investment horizon, intended use of investment proceeds, and investor risk tolerance.

Required:

Assume each of the following investors is saving for retirement. Use the following funds to make a retirement portfolio:

Market Index Fund	Large Cap Value index fund		Small Cap Value Index fund	International index fund			International large cap index fund	International small cap index fund	Bond index fund
IWL	VONV	VSIIX			EFA	DWM		SCZ	USIG

Answer the following questions for each investor.

How long will the investor have before reaching retirement and how does this investment horizon influence the type of assets the investor can include in a portfolio for achieving retirement goals?

Make a possible portfolio for each investor using the funds listed above. What proportion of domestic stocks, international stocks, and bonds is appropriate for the investor's circumstances? Why did you pick the asset allocation that you did? In other words, justify your selections.

Portfolio 1: A newlywed couple in their 20s

Portfolio 2: A couple in their 40s with two incomes and two children

Portfolio 2: A couple in their 50s whose children are grown and on their own

Reference no: EM133291112

Questions Cloud

Compare the different depreciation methods : Compare the different depreciation methods. Give an example of how companies depreciate their plant assets under each method.

What are security characteristic line : What are Security Characteristic Line (SCL), Capital Market Line (CML) and Securities Market Line (SML)? Write down the model of each line and explain each

Briefly discuss the investors incentives : Briefly discuss the investors incentives/motivations when they trade securities by short sale and purchase on margin respectively

How did covid-19 affect businesses-government operations : How did Covid-19 affect businesses, government operations, and overall community functioning?

How long will the investor have before reaching retirement : FIN 331 Western Kentucky University How long will the investor have before reaching retirement and how does this investment horizon influence the type

Characteristics of dumping in international trade : USA on whether the country is facing a dumping situation. In your advice, you should compare the three (3) characteristics of dumping in international trade.

Would the fixed-rate payer in a plain vanilla swap : If an inverse yield curve exists in the market, would the fixed-rate payer in a plain vanilla swap expect to pay or receive the first net swap payment

Compare the different depreciation methods : Compare the different depreciation methods. Why is it important for companies to implement good internal control?

What is the initial investment for the project : What is the initial investment for the project and What is the expected incremental operating third year cash flow

User Account

All Pages