1. It has been suggested by Jamie Lee and Ross professional investment counselor to perform a financial check-up as the first step in investing in

Question

95 users unlocked this solution today!

1. It has been suggested by Jamie Lee and Ross’ professional investment counselor to perform a financial check-up as the first step in investing in mutual funds, even though they are investing $50,000 that was inherited from Ross’ late uncle’s estate. Is it a good time to invest the inheritance, or should Jamie Lee and Ross balance their budget first? 

2. Jamie Lee and Ross have been reading quite a lot about stock funds while researching the classifications of mutual funds. At Jamie Lee and Ross’s stage in life, what different types of stock funds would be recommended for them to invest their $50,000 inheritance in? Why?

3. The investment advisor recommended looking into managed funds, which could help removefrom Jamie Lee and Ross the burden of the decision making about when to buy and sell. But Ross was considering Index Funds, which have a lower management expense.

Using your text as a guide, compare managed funds and index funds. 

Managed Funds	Index Funds

Which fund would you recommend for Ross?Why?

Investing in Mutual Funds

Jamie Lee and Ross did several weeks' worth of research trying to choose just the right stock to invest in. After all, the S50,000 inheritance was a lot of money and they wanted to make the most informed investment choices they could. They discovered, by doing their homework, the various companies' stocks that they were looking to invest in did not seem like they were going to have the promising future that Jamie Lee and Ross were hoping for. They are aware that they are taking a chance with any investment instrument, but they are both nervous about "putting all of their eggs in one basket" and want to be more confident in making their investment choices. But how can they be more assured?

They decided to speak to their professional investment adviser, who suggested that investing in mutual funds may be the way to lessen the risk by joining a pool of other investors in a variety, or bundle, of securities chosen by the mutual fund manager. This way, Jamie Lee and Ross can eliminate the pressure of choosing the right company, and they minimize the chances of losing all of their investment money by diversifying their portfolio. 

A mutual fund sounded like the sensible investment choice for them, but which mutual fund would be tailored to their investment strategy? Jamie Lee and Ross are in their mid-40s and well on their way to reaching their long-term investment goals, as they committed to reaching their objectives early on in their marriage. They set their sights on having the triplets graduate from college debt-free and saving enough to purchase a beach house when they retire. They are looking for a mutual fund that will provide investment income while maintaining the moderate-risk investment path that they are on, as they have some time to go before retirement.