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B. Hypothetical Investors
My Aunt & Uncle
Their names are Janet & Bob. They are both 47 and are planning to retire at 65. They both work full time and their two children are in college. They own a home and a vacation condominium at the beach. They both have 401(k) plans at their company and both contribute to the plans. They also have a brokerage account with Woodstock Discount. They do not withdraw money from their brokerage account. After they pay their monthly bills, college costs for the children, and incidentals, they save roughly $1,000 per month in the mutual funds listed below in their brokerage account.
401(k): This is their retirement "nest egg". We always recommend that customers lean to the conservative side with this money.
Woodstock Discount does not recommend active trading or investment in speculative issues in this type of account. We recommend that they
allocate their investment dollars as follows:
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20% Money Market Funds. |
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30% Investment Grade Bond Funds. |
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50% Growth Mutual Funds. |
The 401(k) plan that they are each in will have the above funds.
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Brokerage Account: They hold a traditional brokerage account with Woodstock Discount. They asked us for advice and we told them to build the following portfolio. We advised investing new money into the same mutual funds in the same proportion.
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10% Money Market Fund. |
We always recommend that 10% of savings go into a money market fund.Emergencies come up, be prepared. |
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20% Bond Fund |
Investment grade with at least an average credit rating of BBB. |
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70% Growth Funds (35%/35%) |
They selected two different growth funds from out list of recommended growth funds giving them 35% in each fund. |
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See out list of recommended mutual funds:
Growth Funds |
Growth & Income Funds |
Income Funds
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