Assume it is Today. You are an investment advisor. An investor with a heavy concentration in real estate assets has come to you for advice. The investor is an owner and operator of real estate throughout the country. The investor says to you: I take my risk in real estate not my investments. I want to make money, but I also want my money available to me when I need to make a real estate purchase. I am very nervous about the stock market and think the S&P will go to 2000 in six months. I do not want to lose money in this portfolio. Getting my money (principal) back is much more important to me than the return on this investment. Liquidity is much more important to me than return as I may need to sell the investment to invest in a real estate project.

Based on the above, what type of portfolio would you design?

Your only options are:

Treasury bonds

High yield (junk) bonds

Municipal bonds

Investment grade corporate bonds

Mutual funds

You can choose wither short, intermediate or long-term maturities.

No CDs minimums are not high enough and client does not want bank risk.