Problem
Investment Planning/Asset Allocation Development
Bill Smith recently inherited $250,000 from the passing of his parents. Bill is 48 years old, recently divorced and makes child and spousal support payments to his ex-spouse. His son, Jeremy is 14.
Bill has come to you, his financial planner because he would like to invest this money intelligently so that he ensures that he's maximizing his return.
You've asked him to fill in an investment questionnaire, which is attached here to this assignment.
Your task: For your meeting with Bill:
Part I: Build an asset allocation model based on Bill's answers to the questionnaire. Using the questionnaire and information from the textbook, explain your rationale for recommending and utilizing various asset classes.
Part II: Using your own research, build an investment portfolio for Bill (i.e. choose the securities you'll use that will correspond to the recommended asset allocation).
For each of your security selections, write a paragraph, explaining:
i. What the investment is or does,
ii. How it fits in within your asset allocation model, and
iii. How or why it's suitable for Bill?