Retirement Planning Example
Retirement Planning ExamplePORTFOLIO ALLOCATION
Investments in the capital markets offer a unique opportunity to protect and grow personal wealth. Any discussion of investment strategy must begin with the investors risk tolerance. Some of the major factors contributing to any individual’s investments strategies are age, total value of savings and other assets, income, family and health. After a thorough discussion and getting some answers to a series of questions, your tolerance for risk can be assessed. This data helps us formulate investment policy that best fits your needs and objectives. Market timing, security selection and asset allocation are the three tools that are used to help reach your financial goals.
James and Lucy Anderson have an average/moderate tolerance for risk based on the risk tolerance quiz they completed. We have completed a review of the Anderson’s current holdings and assigned them into asset class. Some stocks will be sold and other will be held. Within any given asset class, a benchmark of expected performance has been performed. If the current stocks held in that class are underperforming the class in general, they should be sold and replaced with positions that better represents the asset class. Then purchasing patterns will be changed to add asset in the other classes that are currently not represented in your portfolio. The net result will be a well balance asset allocation that is representative of moderate risk tolerance. James and Lucy currently hold over one million dollars in real estate and have a relatively small equities portfolio. The Anderson’s IRAs and non-retirement assets are concentrated in small and mid cap growth and cash.
James and Lucy have a significant income and monthly net cash flow. We recommend that you begin contributing to your retirement and non-retirement accounts as soon as possible.
The specific asset classes to be focused on initially should be large cap...