Scenario: You are to advise a client about how to best invest $50,000 for their future. The client is a married couple, ages 35 and 34 and they have $50,000 to invest. They have moderate risk tolerance and a thirty-year time horizon. You do not need to make recommendations for each spouse separately. Treat them as one client or family. Use percentages to allocate the investments and not dollar-value calculations.

You are to create an asset allocation that is appropriate for the next five years. In other words, the client may rebalance every year, but will not change your recommended percentage allocation for five years. Your advice is good for five years. You will make initial recommendations only.

Be sure that each asset class (category) gets a percentage that is appropriate for their age and risk tolerance. Within each asset class recommend a variety of assets (investments)that give adequate diversification. It can be comprised of ETFs, mutual funds, bonds, cash, T-bills, real estate investment trusts (REIT) , precious metals, commodities, and alternative investments. Do not use the family home, land, or rental real estate as asset choice. Do not use an IRA or mention it anywhere in your report. An IRA is an account, not an investment. The same applies to 401(k), 403(b) or any other retirement account. Do not use life insurance as an investment.

Analyze the reasons for choosing each asset class and the investments within the asset class. You do not have to choose a bunch of individual stocks or bonds to accomplish this. You can make the appropriate ETF recommendations to achieve diversification for most, if not all the asset classes. You can demonstrate your allocation with graphs is you wish.