Jada Wagner is the director of a major charitable organization in Savannah, Georgia. A single mother of one young child, she earns what could best be described as a modest income. Because charitable organizations aren’t known for their generous retirement programs, Jada has decided it would be best for her to do a little investing on her own. She’d like to set up a program to supplement her employer’s retirement program and, at the same time, provide some funds for her child’s college education (which is still 12 years away). Although her income is modest, Jada believes that with careful planning, she could probably invest about $250 a quarter, and she hopes to increase this amount over time. Jada now has about $15,000 in a bank savings account, which she’s willing to use to kick off this program. In view of her investment objectives, she isn’t interested in taking a lot of risk. Because her knowledge of investments extends no further than savings accounts, series EE bonds, and a little bit about mutual funds, she approaches you for some investment advice.

1. In view of Jada’s long-term investment goals, do you think mutual funds or ETFs are the more appropriate investment vehicle for her?

2. Do you think that Jada should use her $15,000 savings to start a mutual fund or an ETF investment program?

3. What type of mutual fund or ETF investment program would you set up for Jada? In your answer, discuss the types of funds you’d consider, the investment objectives you’d set, and any investment services (such as withdrawal plans) you’d seek. Would taxes be an important consideration in your investment advice? Explain.

4. Do you think some type of real estate investment would make sense for Jada? If so, what type would you suggest? Explain.