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Complete 4 page APA formatted essay: Investment Portfolio for the Susan Griffin.Download file to see previous pages... Other items that she opted to reduce spending on included her discretionary expen
Complete 4 page APA formatted essay: Investment Portfolio for the Susan Griffin.
Download file to see previous pages...Other items that she opted to reduce spending on included her discretionary expenses that included the travel, membership, and occasional purchases. Additionally, she may as well forgo the expenses accrued in the tax deductible expenses including charitable giving and property taxes. Expenditure Categories Amount of Expense ($after tax) Income Required ($before tax) Nondiscretionary Expenses Automobile (lease, maintenance, fuel, insurance) 12,000 Clothing 12,000 Dining and entertainment 12,000 Groceries 7,500 Holiday gifts, etc. 10,000 Life insurance 1,800 Long-term care insurance 3,600 Medical (insurance, copayments, medicine, dental) 6,500 Personal care (laundry, etc.) 2,500 Professional fees (legal, accounting, etc.) 7,000 Residence: utilities, cleaning, maintenance 22,500 Subscriptions and books 2,400 Summer home: utilities, cleaning, maintenance 16,300 Supplies and miscellaneous expenses 13,000 Telephone 4,000  . Total nondiscretionary expenses 133,100 190,143 Discretionary Expenses Annual gifts to children 20,000 Golf and other memberships 23,000 Home improvement projects 25,000 Occasional purchases (collectibles, furnishings, etc.) 40,000 Travel 25,000  . Total discretionary expenses 133,000 190,000 Tax-Deductible Expenses Charitable giving 30,000 Residence: property tax 15,500 Summer home: property tax 12,500  . Total tax-deductible expenses 58,000 58,000  . Total Income Required before Taxes 438,143  .  .  . Table 2: Griffin’s Budget (Crane and Stevens 08) After determining the assets, it would be vital for Griffin to determine the appropriate asset allocation. This is usually the most challenging step since it is associated with varied risks....
The greater return possibilities usually come at greater losses risk expenses. This is usually determined by risk/return tradeoff. Therefore, it would be appropriated for Griffin to subdivide her liquid asset into degree of risks. Ventures that are associated with high risks must have higher percentages of her investment. From the list of her appreciate selections, the High – yield bonds or the “junk” bonds should be the first priority since they are issued with companies associated with relatively high credit risks. The company should be allocated fifty percent of the total investment followed by investment – grade bonds which should be allocated 35 percent. The investment grade bonds are noted to be supplied by a high credit quality companies. however, such companies have less liquid compared to the treasury security. The rest of the investment should investments in the U.S. Treasury bonds (Reilly and Brown 88). This company is not associated with credit risks and has it is very liquid. hence, they are easy to buy and sell. The latter company ventures less into risky business. thus, it is unlikely to make much profit.
It should be noted that Griffin was worried about active involvement into the business, these investment types will keep her active by monitoring the movement of these three stock markets and with the advice from her brokers, she will know when to sell and buy the same with return maxim. Through these investments, Griffin will maintain her monthly expenditure and still lead a comfortable life.
