Marc and Julian have $30,000 to invest. They don't have any major loans or other liabilities. Each intends to work full time. Together, they take home about $85,000 a year in income. They respect each other's values and are willing to compromise on risk. Marc and Julian agree that they should hold on to some cash for emergencies and for a trip to the beach they want to take next year. They also both agree that retirement is important. Marc is worried that Julian will put too much money in high-risk ventures. Julian is worried about tying up money in real estate and not having enough to buy stocks. Marc and Julian agree that they want to allocate some percentage of their assets to cash, some to stocks, and some to bonds. They are open to alternative investments. They need help determining the right percentages to allocate in each area. Marc is a passive investor. He wants to make a decision and forget about the details. Julian is an active investor. He likes to research specific stocks, particularly ones with high risk and high reward.

 

The following steps:

 

1. Build a portfolio: Develop a portfolio that considers both Julian's and Marc's priorities.

2. A paragraph: explaining how your allocation of Marc and Julian's portfolio matches their investment goals and priorities.

 

Marc and Julian have $30,000 they would like to invest. Based on all you know about their investment priorities, interests, and tolerance for risk, assign each type of investment a percentage of the $30,000. Your allocations should add up to 100%.

 

Type of investment	The average annual rate of return	Recommended allocation (percentage)
Cash (includes savings accounts and CDs)	0.5%
High-risk stocks and bonds	8 - 10%
Low-risk stocks and bonds	3 - 4%
Mutual funds	5 - 7%
Real estate	6 - 8%
Retirement	4 - 6%