One of Marions sisters in Portugal has developed a serious health condition. The condition can be treated but it is expensive. Marion has offered to pay for the medical expenses and intends to make two visits per year to Portugal for the next three years. This will cost approximately AUD65,000 per year (for three years).

Q.1 Marion intends to use the investment portfolio to fund this abnormal expense and acknowledges that the likely annual income returns generated by the investment portfolio will not be sufficient to meet all of this expense. This means that some of the securities held in the investment portfolio will have to be sold from time to time and the proceeds used to supplement the income returns. Discuss the key issues that Marion will need to take into consideration whilst managing the investment portfolio during the next three years. (4 marks)