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The moderate investor - case study
Sarah and Gerard are 45 and 47 respectively. Sarah returned to full time employment five years ago after spending 15 years as a housewife raising the couple’s four children. She earns $50,000 per year. Gerard has worked full-time for the past 25 years and earns $250,000 per year. The couple have an investment property worth $300,000 which they wish to sell to release the cash; combined superannuation savings of $500,000; and no outstanding debts. Their children are all in full time university education.
Sarah and Gerard both wish to retire in ten years time. They recognise they require additional retirement savings therefore wish to invest the $300,000 they make from the sale of their investment property in a relatively high growth investment vehicle, however without risking depreciation of the capital value of their investment.
They seek professional investment advice from their financial planner, based on the following requirements:
- High returns through capital appreciation and income;
- Diversification weighted towards shares, property and fixed interest;
- Very low chance of capital depreciation;
- Long term outlook (5+ years).
Strategy
Sarah and Gerard’s planner recommends they invest in a balanced managed fund with assets weighted approximately 50% towards international and Australian shares with diversification provided through a 50% (approximate) allocation to property, fixed interest and cash. He recommends a review of their 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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