Project 1 - Creating and Managing a Portfolio BUS 172A...

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Creating and Managing a Portfolio BUS 172A Marco Pagani December 10, 2007 ASSIGNMENT 1
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Investment Policy Our client, Debra Smith, is 53 years old. She is a single mother with two children, a son and daughter. Her son is 30 years old and her daughter is 28 years old. Both of her children are married and have their own children. Debra has $500,000 to invest in her portfolio. Her investment horizon plan is to retire at the age of 66 years old. She has approximately 13 years until her retirement. Her expected life span is another 30 years after she retires. Her retirement income would be approximately $35,000-$45,000 to enjoy a standard of living. She plans to travel the world and spend time with her family and friends with the free time she will have. Debra will want to invest in about 50% in stocks, 30% in bonds, and 20% in mutual funds. She will spend $10,000 into the stock market, she plans to sell them when the stock rises and sell them when it falls. She will look in the newspaper to find out the most current information for selections of stocks. We will also invest another $10,000 into the mutual funds to invest for her long-term retirement plans. She will also plan to invest approximately $50,000 in bonds. Bonds normally have maturities ranging from 2 years to 30 years. So it will be good for her long term plans. In Debra’s active strategy, we will try to identify the stocks that we think will do best in the future in our security analysis. In the passive security selection strategy, we will buy mutual funds and bonds. Some of Debra’s assets will be sold quickly because it will not progress as planned. However, we will keep all her mutual funds and bonds until she retires unless they are not advancing the way we wanted it. Sometimes we will be buying an asset and
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then immediate reselling it. We will also liquidity all her assets by the November 30,
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This note was uploaded on 09/08/2010 for the course BUS 172A at San Jose State.

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Project 1 - Creating and Managing a Portfolio BUS 172A...

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