Maggie and Chris Law, a married couple aged $42$ and $44,$ respectively, are meeting with you, their new investment adviser. The Laws have worked their entire careers at Whorton Solutions $($WS$),$ a multinational technology company. The Laws have two teenage children who will soon begin college.

You review the Laws$$ current financial position. The Laws have an investment portfolio consisting of $$800,000$ in equities and $$450,000$ in fixed$-$income instruments. You note that $80\%$ of the equity portfolio consists of shares of WS$.$ The Laws also own real estate valued at $$400,000,$ with $$225,000$ in mortgage debt. You estimate the Laws$$ pre$-$retirement earnings from WS have a total present value of $$1,025,000.$ You estimate the Laws$$ future expected consumption expenditures have a total present value of $$750,000.$

The Laws express a very strong desire to fund their children$$s college education expenses, which have an estimated present value of $$275,000.$ The Laws also plan to fund an endowment at their alma mater in $20$ years, which has an estimated present value of $$500,000.$ The Laws tell you they want a high probability of success funding the endowment. You use this information to prepare an economic balance sheet for the Laws.

You conclude that a portfolio of $75\%$ global equities and $25\%$ bonds reflects an appropriate balance of expected return and risk for the Laws with respect to a $20-$year time horizon for most of moderately important goals. You recommend the Laws following a goals$-$based approach to asset allocation and offer three possible portfolios for the Laws to consider. Selected data on the three portfolios are presented in the following table.

Cash Fixed Income Global Equities

Portfolio $135\%55\%10\%$

Portfolio $210\%20\%70\%$

Portfolio $310\%40\%50\%$

$5.$ Point out and discuss the major concern for the Laws$$ current financial assets from an asset allocation perspective.

$6.$ Which portfolio best meets the Laws$$ education goal for their children? Explain your answer.

$7.$ Which portfolio best meets the Laws$$ goal to fund an endowment for their alma mater? Explain your answer.