Investment Analysis and Portfolio Management

Case Study #1 Single Professional

Client Fact Finder:

Name: Jennifer age 27

1. Education: MBA in finance
2. Occupation: working for a large multi-national financial institution for past 3 years
3. Income: $ 65,000 non-management position (no bonuses)
4. Retirement Plan: participates in company 401(k) contributes 6% of her salary (currently there is no company match)
5. Residence: rents an apartment on Staten Island - $ 1,100.00 monthly (rent includes gas & electric)
6. Medical coverage: fully paid by employer

After a lengthy discussion with Jennifer, you have determined her goals and objectives and they are listed in order of importance:

1. maintain an emergency fund equal to 6 months of expenses
2. save for wedding
3. save for a house (plan to buy in 5 years)
4. start to save for retirement (supplement to her 401(k))

Planners Notes:

1. Jen has a good understanding of the financial markets and expects the stock market to outperform other sectors
2. She has a moderate to aggressive risk tolerance
3. Jen is engaged to Stephen and they are planning a Spring 2021 marriage
4. Jen is in the combined 28% tax bracket
5. She has $ 6,800.00 of credit card debt

Jennifer has provided the following information:

Expenses: Assets:

Rent: $ 1,100 savings : $ 16,000

Cable: 120 401(k): 8,600

Phone: 40 checking: 400

Cell phone: 150 EE Bonds: 6,000

Auto Ins: 120 stocks: 7,400

Auto Lease: 450

Auto gas: 60

Travel (work): 200 Liabilities:

Entertainment: 400

Credit card: 300 Credit card: $ 6,800

Food: 500

Misc: 400

As Jennifers financial planner you need to do the following:

1. construct a balance sheet
2. construct a cash flow statement
3. calculate her discretionary income (amount available to invest)

4. create an investment portfolio to meet her goals and objectives