Portfolio Analysis Project C

Mr. Meriwether has hired you to manage his finances, after a friend of his recommended you. From your initial interview, here are your notes:

John Meriwether is 42 years old, married to Grace (age 38), with two children aged 10 and 5. His current income comes from his work at a small regional telecommunications services company, and is $87,000 per year. Grace works as a teaching assistant at a community school, making about $23,000 per year. They currently own their house and have no debt. Their current assets are as follows:

• 40,000 shares of GE (NYSE:GE) that John inherited from his father recently

• Their house, current market value of $400,000

• Their cars, about 3 years old and worth $11,000 each

• $220,000 in a Certificate of Deposit, maturing in a month

• 100 shares of Apple (NASDAQ:AAPL), which John bought on his friends hot tip two years ago

John and Grace would like to have enough to pay for their childrens education should they go to college. You can assume the need will be approximately $150k per child (in todays $, this will need to be adjusted for inflation). The couple would like to retire by the time John reaches 65 so they could pursue their love of traveling. They estimate theyll need about $100k/year (in todays $) adjusted for inflation to do the travel they want and otherwise maintain their lifestyle.

Mr. Meriwether would

1. Occasionally Mr. Meriwether likes to take an active hand in a portion of his investments. He has asked you to suggest three investments that you think would outperform their comparative benchmark and fits his overall investment goals.

Each of the deliverables will account for 20% of the grade of the project. The final 20% will reflect depth of analysis and quality of presentation.

Sold GE in year 1

Buy two new cars year year 7 ($20000 each)

Pay for 4 years of college year 8-11

Pay 4 year of college 13-16

Buy two new cars year year 7 ($20000 each)

Sell house year 22