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B. Hypothetical Investors
The Retired Couple
Their names are David & Helen. They are both 62 and have been retired from their careers for a few years.
She has $900/month income from a pension plan from her previous employer; his is $1200/month.
So, they have regular income for living expenses. Their goal is to live as comfortably as they can,
travel, see their grandchildren, and enjoy life. They have concerns though. They do not want to work
again, except for some light part-time work for extra spending money. We recommend that they build a
portfolio designed to give regular monthly income and provide an opportunity for growth. They both have
401(k) plans that they have rolled over into an IRA. They withdraw a modest amount money every year from
their IRA's. They also have a traditional brokerage account with Woodstock Discount. This is the bulk of
funds they saved over the years. When they sold their home after they retired, they bought a smaller home
and invested the profit from the home into their brokerage account. They withdraw dividends and interest
monthly from their brokerage account for expenses, travel, and presents for their granddaughters.
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IRA: 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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40% Investment Grade Bond Funds. |
See out list of recommended funds |
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40% Growth Mutual Funds. |
See our list of recommended 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 also advised them to take some of the dividends & interest payments and spend them enjoying life.
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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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30% Bond Fund |
Investment grade with at least an average credit rating of BBB. |
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60% Growth & Income Funds (30%/30%) |
They selected two different growth & income funds from out list of recommended growth & income funds giving them 30% 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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