Question
Could someone please help me with the below case? Investment Policy Statement Case Study for James Smith Objective: Please create an investment policy statement (IPS)
Could someone please help me with the below case?
Investment Policy Statement Case Study for James Smith
Objective:
Please create an investment policy statement (IPS) for James Smith using Roger Gibson's Asset Allocation principles , taking into account his financial situation, risk preferences, and investment goals. You may work with a partner on this project.
Background:
James Smith is a 35-year-old engineer, married with two children. He is financially stable, with a combined annual household income of $200,000 and rents (not owns) his home. He has a relatively low risk aversion and is concerned about the fees associated with his investments. He plans to retire in approximately 30 years.
Investment Goals:
Long-term capital growth
Retire in approximately 30 years
Current Assets: 401(k): $361,000; IRA: $66,000; Taxable Brokerage Account: $315,000
Total Assets: $742,000
Jamess Portfolio Allocation:
Domestic Stocks: $269,000 American Funds Growth Fund of America (AGTHX): IRA: $24,000; 401(k): $140,000 Microsoft Corporation (MSFT): Taxable Brokerage Account: $52,500 Apple Inc. (AAPL): Taxable Brokerage Account: $52,500
International Stocks: $193,000
American Funds Capital World Growth and Income Fund (CWGIX): IRA: $18,000; 401(k): $105,000
Alibaba Group Holding Ltd (BABA): Taxable Brokerage Account: $35,000
Toyota Motor Corporation (TM): Taxable Brokerage Account: $35,000
Bonds: $175,000
American Funds Bond Fund of America (ABNDX): IRA: $24,000; 401(k): $116,000
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD): Taxable Brokerage Account: $35,000
Cash: $35,000
Fidelity Government Money Market Fund (SPAXX): Taxable Brokerage Account: $35,000
Cryptocurrency: $70,000
Grayscale Bitcoin Trust (GBTC): Taxable Brokerage Account: $42,000
Grayscale Ethereum Trust (ETHE): Taxable Brokerage Account: $28,000
Your investment policy statement (IPS) should include, but is not limited to, the following components:
Client's personal information and background
Investment objectives and goals
Risk aversion and risk profile
Time horizon for investments
Target asset allocation and diversification
Rebalancing strategy and frequency
Tax considerations and strategies
Performance measurement and benchmarking
Monitoring and review process
Constraints, restrictions, and unique circumstances
Investment fees, expenses, and cost considerations
Roles and responsibilities of the client, advisor, and other parties involved in managing the investments
Legal and regulatory requirements
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