Investment Plan
Description
About this Assignment
Financial institutions and markets affect almost every aspect of our lives. What we buy, where we work, and when we can retire are all influenced by economic activity. In this course, you learned about risk exposure, the basic features of investment vehicles, the application of common financial formulas, and the impacts of regulatory and monetary policies on investments.
For this assignment, you will design an investment plan for an individual based on the individual’s retirement plan, risk preferences, current wealth, and future wealth requirements. This investment plan should be at least 1,000 words.
Prompt
You are a financial advisor who regularly educates new clients about how markets and economic systems work to take the mystery and fear out of investing. You’ve found that when clients understand how things work behind the scenes, they feel more confident in continuing to invest throughout their lives despite whatever doom and gloom they see or hear in the news.
Your latest client is a 32-year-old grocery store manager, married to a 30-year-old woman who takes care of their two children and household. The client wishes to retire at age 60. He has access to a 401(k) through his company, but so far hasn’t invested any money. He bought a house last year on a 15-year mortgage and does not expect to move even once he retires. He likes his job and expects his salary to max out at about $75,000 a year. In retirement, he would like to be able to live on 80% of what he was making while working and hopes to have four decades of funded income. He knows he has many years until retirement, and since he anticipates having his house paid off before he retires, he is comfortable with a higher risk in the early years of investing.
Design a well-crafted investment plan that helps the client meet his goal. Your plan should contain at least 1,000 words. Be sure to discuss which combination of asset classes and tax-sheltered retirement accounts you plan to use, and describe how these factors will help meet the client’s investment goals. You should also identify ways to mitigate risks and include a detailed assessment of how changes in regulatory and monetary policies could impact performance of the investment portfolio you designed.
Using Sources
You may refer to the course material for supporting evidence, but you must also use three sources and cite them using APA format. Please include a mix of both primary and secondary sources, with at least one source from a scholarly peer-reviewed journal. If you use any lessons as sources, please also cite them in APA (including the lesson title and instructor’s name).
Primary sources are first-hand accounts such as interviews, advertisements, speeches, company documents, statements, and press releases published by the company in question. Financial magazines and newspapers are excellent sources for this kind of information.
Secondary sources come from peer-reviewed scholarly journals, such as The Journal of Finance. You may use sources like JSTOR or Google Scholar to find articles from these journals. Secondary sources may also come from reputable websites with .gov, .edu, or .org in the domain. (Wikipedia is not a reputable source, though the sources listed in Wikipedia articles may be acceptable.)
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