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January 31, 2015

January 31, 2015

Posted by **Anonymous** on Tuesday, July 8, 2008 at 8:24pm.

- Personal Finance Concepts -
**DrBob222**, Tuesday, July 8, 2008 at 8:26pmDo you have a question?

- Personal Finance Concepts -
**drwls**, Tuesday, July 8, 2008 at 8:52pmHe should keep the $250,000 condo if it is in Manhattan, whatever else he does. Ask the lady friend to forego the fancy wedding and share the wedding and honeymoon cost, if she wants to get married, or look elsewhere. Seek out an investment consulation with Schwab or Fidelity. Cliff should consider a prenup agreement if he is serious about getting married. That should be easy, since he is a lawyer.

For retirement in 25-30 years, he would need about $10 million dollars, assuming 8% average investment total return and 3% average inflation.

- Personal Finance Concepts -
**Ray yousef**, Saturday, February 7, 2009 at 12:10am1. Explain some disadvantages of Cliff's current investment approach.

At first one of the important disadvantages in Cliff’s current investment approach is that

He has never taken the time to evaluate his portfolio performance. It has got serious

Consequences and when he started investing in stocks and bonds he made his

Selections on the basis of articles that he read and that is a highly risk decision for any

Investor to take .basically there is a possibility that he can lose all of his investments in

A very short period of Time, it is such an unprofessional step that can be taken in the

Mutual funds, stocks and bonds investing, plus He may not achieve his financial

Objectives at all. The amount of profits will depend on His financial situation and the market

And the amount of his investment will depend on risk profile, Time horizon and Savings,

So he needs to evaluate his portfolio continuously.

As an investor he needs to have an active portfolio analysis and management. Portfolio

Analyses takes the ingredients of risk and return for individual securities and considers

The blending effect of combining securities, which at least will help him to prevent a lot

Of money losing and the Portfolio management will help him in the dynamic function of

Evaluating and revising in terms of stated objectives. That’s why a portfolio rebalancing

Is very important to ensure that the strategy stays consistent and current with changes

In the needs of the financial situation and market conditions that can change at any

Time, there is different types of financial form that he can use like investing in shares of

Companies equities and in this type he can chose between dividend or growth

Investment, and there is bonds, CD accounts ,Cash Equivalents and Mutual funds.

2. Construct a portfolio for Cliff, limiting your selections to mutual funds (assume that he

Sells his current stock and bond holdings). Make sure your plan indicates specific dollar

Amounts for each portfolio component. Make sure your plan also explains your

Selections for each portfolio component.

I think it’s a good start that he already started investing, His main focus needs to be the

Protection of his earning against disability resulting from injury or sickness. He needs to

Be married in 3 years, His wish is also to take a long term saving plan for retirement.

His portfolio will be of Moderate risk portfolio so here are some steps for him to take:

Equity Funds which is 40% of the 90.000 = $36,000.

Government Bond Funds which is 30% of the 90.000=$27000.

Growth & Income Funds, that is 20%of the 90.000= $18000.

Index Funds that is 10% of the 90.000= $9000.

That will result to the Total $90000.

3. Explain how Cliff should periodically rebalance his portfolio, indicating how frequently

Rebalancing should be done.

Cliff needs to focus on his investments carefully and determine those that have had

Losses then he need to sell them. Cliff can recognize a tax deduction for those losses

Up to few thousands per year with the remainder carrying over to the following year and

That will at least get him some of his money back plus he needs to keep his eyes

Opened for new companies that can make him some money and what I mean is he

Needs to keep looking for better deals and higher rates.

Also he needs to invest in the 401k as much as possible, and if at any point he if

Achieved His goals in one investment he needs to set new goals and that will pay off

at the End. He needs to keep up with three main factors; first he needs keep the record

of the total cost of each security at that time, as well as the total cost of his portfolio and

That least give him the time to take any action if it is needed then he have to Compare

On a chosen future date, review the current value of his portfolio and of each asset

Class and calculate the weightings of each fund in his portfolio by dividing the current

Value of each asset class by the total current portfolio value that will give him more

Choices and option and at last he needs to adjust If he finds that changes in his asset

Class weightings have distorted the portfolio's exposure to risk, he should take the

Current total value of the portfolio and multiply it by each of the percentage, weightings

Originally assigned to each asset class.

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