Based on the information below:

I could noticed Current Portfolio Allocation; however, I need to construct recommended client portfolio allocation (portfolio return).

I do not know how to do that, could you help? Many thanks ...

construction of investment client portfolio

Paul and Jean Cartnight need investment advice as they prepare to formally retire. Jean will also be retiring after working for 20 years as her companys bookkeeper. Paul is 65 years old and in excellent health. Jean is 63 years old and also in excellent health. The Cartnight have no children and are not concerned with estate planning. They would like to donate a portion of their wealth to their University, where they met, fell in love, and got a great education.

Economic Assumptions :

The current medium term economic forecasts are for continued, historically low short-term interest rates and a normal yield curve. Economic growth is predicted around average, inflation should be lower than historically, and unemployment levels hover around the natural rate.

Income Tax Information:

The Cartnight family is in the 25% federal income tax bracket. The state and local taxes for the Cartnight are 5.6%.

Personal and Financial Goals:

1. Maintain current lifestyle and corresponding spending

2. Travel more frequently.

3. Review investment portfolio and make changes as necessary to reflect different priorities and risk

tolerance level during retirement. In order of priority, clients indicate:

a. Willingness to take normal investment risks

b. Desire for adequate annual income

c. Hope for reasonable safety to principal, inflation protection, tax advantages and long term

appreciation of principal

Balance Sheet Year Ended December 31 ASSETS Current Cash $8,000 Investments Securities Portfolio, Current Market Value $60,000 55,000 30,000 35,000 25,000 Cash Rollover IRA-William Rollover IRA-Mary 01k-William 401k- Mary Investment account 1,393,000 Total Real Assets 288,000 126,000 60,000 $55,000 Home Summer Home Personal Property Automobiles $529.000 Total TOTAL $1,922,000 LIABILITIES Current 21,500 Credit Cards Non-Current $28,000 80,000 $60,000 Auto Loans Primary Home Mortgage Summer Home Mortgage Total S189,500 Net Worth $1,732,500 $1,922,000 TOTAL LIABILITIES AND WORTH Annual Pro Forma Income Statement Cash Basis CASH INFLOWS Social Security 32,000 $16,500 William Marilyn Dividends TBD Interest Income TBD TBD $48,500 Retirement drawdowns Total CASH OUTFLOWS Mortgage 1,385 $985 Primary residence Summer home Repairs and Maintenance Primary residence $8,600 Summer home 3,900 Insurance Primary residence $800 Summer home $550 $2,000 $6,500 $4,800 $7,200 $5,000 $5,000 6,000 Automobiles Automobile payments Food Car payments Clothing Travel Charitable contributions TBD Federal Income Tax TBD State Income Tax Total $52,270 Net Income/Loss $3,770 Current Portfolio Allocation Cash $60,000 Common Stock 164,500 1,000,000 $168,500 Mutual Funds Bonds Total Notes: Balances are total of all accounts (Cash, IRAs, 401Ks, and Investments) 2. Client cannot locate portfolio details so exact securities currently cannot be determined 1. Balance Sheet Year Ended December 31 ASSETS Current Cash $8,000 Investments Securities Portfolio, Current Market Value $60,000 55,000 30,000 35,000 25,000 Cash Rollover IRA-William Rollover IRA-Mary 01k-William 401k- Mary Investment account 1,393,000 Total Real Assets 288,000 126,000 60,000 $55,000 Home Summer Home Personal Property Automobiles $529.000 Total TOTAL $1,922,000 LIABILITIES Current 21,500 Credit Cards Non-Current $28,000 80,000 $60,000 Auto Loans Primary Home Mortgage Summer Home Mortgage Total S189,500 Net Worth $1,732,500 $1,922,000 TOTAL LIABILITIES AND WORTH Annual Pro Forma Income Statement Cash Basis CASH INFLOWS Social Security 32,000 $16,500 William Marilyn Dividends TBD Interest Income TBD TBD $48,500 Retirement drawdowns Total CASH OUTFLOWS Mortgage 1,385 $985 Primary residence Summer home Repairs and Maintenance Primary residence $8,600 Summer home 3,900 Insurance Primary residence $800 Summer home $550 $2,000 $6,500 $4,800 $7,200 $5,000 $5,000 6,000 Automobiles Automobile payments Food Car payments Clothing Travel Charitable contributions TBD Federal Income Tax TBD State Income Tax Total $52,270 Net Income/Loss $3,770 Current Portfolio Allocation Cash $60,000 Common Stock 164,500 1,000,000 $168,500 Mutual Funds Bonds Total Notes: Balances are total of all accounts (Cash, IRAs, 401Ks, and Investments) 2. Client cannot locate portfolio details so exact securities currently cannot be determined 1