Project2Investment Policy Statement 12_08_2009Kats

Project2Investment Policy Statement 12_08_2009Kats -...

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Investment Policy Statement Project #2 Bus 172B M/W 12:00 F.J. Jones 12/9/2009 December 9, 2009
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Dear Mr. Smith, As you know over the last 10 years I have been working hard to build up my wealth and my investments. Since I have been able to build an investment portfolio as well as put aside savings I have decided that I am going to take a year off and sail around the world. During this time it will be hard for me to monitor my own finances and I do not wish to worry about them while on my trip. However I want you to run my portfolio as I would if I was still here. I am leaving you some guidelines to follow in my absence. I would like to maintain a moderate growth portfolio since I am still young and am willing to have a slightly higher risk in order to obtain higher returns. I have attached my investment policy statement to this letter. In it I have detailed how I want my assets allocated and what to do in the event of market changes. I know that you will take care of my portfolio in my absence and I will contact you in a year when I return from my travels. Sincerely, Katie Scull I. Personal Characteristics
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A. Level of Wealth I currently work as an investment banker and make about $200,000 annually; below is my current balance sheet. As you can see I have $50,000 in investment assets and $100,000 in retirement assets. Balance Sheet as of December 2009 Assets Amount in Dollars Cash - Money Market 150,000 Securities - stocks / bonds / mutual funds 50,000 Personal property (autos, jewelry, etc.) 50,000 Retirement Funds (eg. IRAs, 401k) 100,000 Real estate (market value) 500,000 Sailboat 150,000 Total Assets $1,000,000 Liabilities Amount in Dollars Real estate mortgage (Home) 400,000 Credit cards 5,000 Boat Loan 100,000 Total Liabilities $505,000 Net Worth $495,000 B. Personal Information Risk Tolerance: I am a moderate growth investor and am willing to take on additional risk in my portfolio in order to gain higher rewards. In the first risk tolerance test I took I scored a
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Project2Investment Policy Statement 12_08_2009Kats -...

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