FIN 2328: Assignment 2 - Investment Management

A new client, Tamara Stocks, is seeking your advice regarding her investments. Tamara has the following:

Account

Amount

RRSP

$60,000

TFSA

$30,000

Non-Registered

$300,000

In addition to these accounts, Tamara has just received an inheritance of $350,000 from a relative. Tamara has $10,000 unused TFSA contribution room and $50,000 unused RRSP contribution room and earns $150,000 annually (I wish). Tamara has told you that she wishes to retire in the next 10 years.Within the next 5 years she wishes to purchase a cottage and pontoon boat that she estimates to be $280,000.Based on the interview with Tamara, and her moderate risk profile, construct Tamara's investment portfolio.

1. Indicate the recommended structure for each account:
2. Intended time horizon (0 - 2 years, 3 - 5 years, 6 - 10 years, 10+ years)
3. Risk profile (high, medium, low)
4. Percentage of equities / fixed income.
5. Indicate the recommended investments for each account:
6. Mutual funds (limit of 6 per account)
7. Cost of each fund (MER) in percentage terms
8. Total cost of the account in dollar terms
9. GlobeFund rating (1 - 5 stars) for each fund
10. Support recommendations - Explain why they have recommended the funds you have chosen, and explain how they are properly aligned to Tamara's goals, time horizon, and risk tolerance.
11. Assume no future contributions or withdrawals. Assume equities average 7% annual growth. Assume fixed income averages 4% annual growth. How much does Tamara have when she retires 10 years from now?

Tamara is in desperate need of your assistance and has come to ask for your managing her investments. Please help her!