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The conservative investor - case study
Evelyn is 58, a widower and works on a part-time basis. She earns $45,000 per year, currently has $100,000 in superannuation, and received $500,000 in life insurance upon the death of her husband. She wishes to retire in two years and seeks to invest the $500,000 payout to receive a moderate rate of return with no loss in value. Evelyn does not feel comfortable investing directly in the share or property market and would like somebody else to make all of the investment decisions on her behalf, without paying a high management fee.
She seeks professional investment advice from her financial planner, based on the following requirements:
- Moderate-to-low returns through capital appreciation;
- Diversification weighted towards cash and fixed interest;
- No/minimal chance of capital depreciation;
- Short term outlook (approximately 2 years).
Strategy
Evelyn’s planner recommends she invest in a conservative managed fund with assets weighted approximately 90% towards cash and fixed interest with diversification provided through a 10% (approximate) allocation to property, and shares. He recommends a review of her investment strategy on a six monthly basis to ensure it is on track to achieve the desired outcome.
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Further Information |
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