Next, Mr. and Mrs. Gold create their financial snapshot:

• Liquid net worth: $600,000
  • Stock portfolio
    • Individual high-tech stocks: $150,000
    • High-tech index and mutual funds: $225,000
  • Long-term high-yield bond funds: $25,000
  • Cash and money market funds: $200,000
• Value of house: $450,000 (no mortgage)
• Income: Annual pension and social security payments: $28,000
• Annual expenses: $60,000
• Credit card debt: $40,000
• Life insurance: Each spouse has a $500,000 death benefit. High annual premium.

What would be some appropriate steps for Mr. Gold to take? Consider each option individually.

MARK ALL THAT APPLY

A. Stop paying into life insurance and let the policy lapse.

B. Increase his life insurance policy.

C. Transfer some of his holdings from bonds to stocks.

D. Transfer some of his holdings from stocks to bonds.

E. Move some of his stock portfolio into stock mutual funds which pay a higher dividend yield.

F. Move all his stock holdings into stock mutual funds since those are safe and cant lose money.

D. Use money from the cash and money market funds to buy a bond ladder in order to get predictable income.