A Case Study of an Individual Investment Portfolio, Asset Allocation, and Strategy Essay

BackgroundZach Burnett is a 25 year-old professional with an expected remaining work life of 40 years. He is not married and has no dependents. While he hopes to eventually marry and have a family, his primary investing objective is to provide for his own retirement. Return objectiveZach expects to provide for his discretionary and non-discretionary income needs through employment income for the next 40 years. As such, his return objectives are in the context of asset appreciation. Any interest yield will be plowed back into his equity positions. Taking a rational, long-run perspective, Zach is seeking a return target that is relative to the performance of the SP 500 Index. At a minimum, he hopes to achieve an annualized return no less than that of the index. Given active management of his asset allocation and strategy, he hopes to achieve a return of 141 of the index return. Risk ToleranceIn the early stages of the portfolio (years 1 through 10), Zach is willing to take on a level of risk reflective to that of the index. That is to say that while he is conservative in his decision-making, he recognizes that his work and career horizon prospects afford him the ability to recover from any shortfalls. The time horizon of his portfolio also allows for smoothing across business cycles. LiquidityZach has no expected liquidity needs in the first 10 years of the portfolio. Time HorizonAs stated above, Zachs time horizon is 40 years. Initial strategy and asset allocation will be undertaken in the context of the first 10 years of the portfolio. ObjectivesConstraintsReturn During good years, 141 percent of the indexed returns of the SP 500.Return No less than the SP 500 index.Risk Tolerance Medium-high.Measuring Risk Treynor ratios.Liquidity Money will not need to be highly liquid in the first 10 years of portfolio cash reserves can be low.Time horizon Retirement in 40 years.Legal and Regulatory Portfolio represents a Roth IRA. Must adhere to contribution...

Comments

Post a Comment

Popular posts from this blog

Character Analysis of Basil Hallward in The Picture of Dorian Gray, a Novel by Oscar Wilde Essay

The main character in The Picture of Dorian Gray, Dorian, is a man too easily influenced by his surroundings. He is quoted as saying, Basil Hallward is what I think I am Lord Henry is what the world thinks me Dorian is what I would like to bein other ages, perhaps (Wilde). This comparison falls in line with the moral of the story because Dorian is stuck with eternal youth and beauty even though he has a wicked soul. This causes different views of him by people who observe his daily life. Dorian is a sponge throughout the novel that absorbs everything and allows it to shape his personality, morals, and actions. Dorian Gray takes influence from Lord Henry, Basil Hallward, and the culture of society during which the novel was written. Lord Henry is the epitome of a wealthy, hedonistic gentleman seeking only pleasure, with little regard to cost or consequence. Lord Henry Wotton outwardly propounds hedonism, but it is his extreme egotism that drives him to manipulate both Basil Hallward a
Read more

An Analysis of the Character of Chichikov in the Poem, Dead Souls by Nikolai Gogol Essay

Dead Souls takes place in the Russia of the late 1800s, where, unlike in America, one must be born into a prosperous family in order to have opportunities. The main character, Chichikov, is clever enough to develop a scheme in which he can rise from being a petty clerk to a respected landowner. In order to do this, Chichikov moves into a new town, pretending to already be a landowner, and begins a quest to buy the names of dead serfs who have not yet been officially reported dead. Each person that Chichkov presents this offer to has a different reaction, starting with the shy and introverted Manilov. Though he does not understand Chichikov's need for the names of these dead serfs, Manilov is a character that is so desperate for company that it does not take any effort to trick him into selling his dead souls cheaply. However, as Chichikov continues his journey, he starts to deal with more clever landowners who become suspicious of his scheme. Chichikov finds that the townsmen know
Read more

A Literary Analysis of the Third Twin by Ken Follett Essay

The Third TwinThe Third Twin by Ken Follett is a type of mystery book. It makes you look at different aspects of the story. When you think you know whats happening it is not always what you think.Dr. Jeannie Ferrami, a scientist funded by a university who is doing a study on twins is one of the main characters in the story. Jeannie Ferrami is tall with long brown hair and is also very athletic. Steve Logan a student at another college is also a very important character in the story. Berrington Jones the head of the college funds Dr. Jeannie Ferrami until Jeannie discovers something Berrington didnt want her to know. Ricky Phillips Berringtons son is a twin just and he plays a small part but with a big impact on the story. Lisa Miller who is Jeannies best friend comes early into the story playing a very dramatic role, another small character is Dennis Pinker one of the twins in the story who is a murderer and is also being studied He is one of Steve Logans twin brothers.Lisa Miller and
Read more