I already attached the case study and require statement below, please read careful and make a quality work, and you also need to:1. Do this case study on World Doc by follow “writing an investment policy statement” step by step2. make a balance sheet for this case studythank you!
Unformatted Attachment Preview
Fundamentals of Investment and Portfolio Management
Class Project: Investment Policy Statement
Mary and Harry Reser
Mary and Harry Reser, 57 and 62, are looking ahead to retirement early next year.
They are thinking about heading south to a cheaper and warmer state but haven’t
made a firm decision. Harry is the sole breadwinner and earns $64,543, plus an
additional $8,169 from investments.
The Reser’s two main concerns are longevity and taxes. “We want to take income
from investments with the least amount of tax liability and make the money we have
accrued last as long as we do,” notes Harry. He also noted a concern about taking
money out of tax-deferred plans in the correct manner to avoid IRS penalties.
The Reser’s can be considered “millionaires next door,” with an impressive net
worth of $1,065,951. They have absolutely no debt and the following assets:
$32,000 in a 2% bank passbook account, $347,365 in telephone stock; $224,901 in
Harry’s 401(k); $31,000 in an annuity; $202,685 in mutual funds; $23,000 in whole
life insurance; their $190,000 home; and $15,000 of personal property.
No information was provided as to the type of mutual funds or the 401(k)’s asset
allocation (i.e., the percentage of the account in different types of assets like stocks
and bonds). Harry contributes 15% of his salary to the 401(k) and appears to have
been doing this for many years. Neither spouse has an individual retirement account
The Resers estimate that their monthly expenses total $4,500. They are concerned
about the future cost of health care and note that, in retirement, “the biggest
expense not in our current budget will be medical insurance.” Currently, Harry
shares part of the cost of health coverage with his employer but this coverage will
end after he retires. His employer also provides short-term disability coverage and
matches his 401(k) contribution up to the first 8% of pay.
The Reser’s car and home have $500,000 and $300,000 of liability coverage,
respectively. They do not own an umbrella liability policy. The Resers are thinking
of tapping their $23,000 of life insurance cash value. “We do not feel that we need
life insurance any longer,” says Harry, “and will most likely cash them in.”
Taxes were mentioned several times as a major concern. The Reser’s taxable income
is $50,543. If their adjusted gross income in retirement exceeds $44,000, 85% of
their Social Security benefits will be taxed. Tax on Social Security is figured on what
is known as “preliminary adjusted gross income.” This figure includes all earnings,
pensions, dividends and interest from investments, including tax-free municipal
bonds, and half of a person’s Social Security benefit.
Guide to Writing An Investment Policy
Step 1. Introduction
? Describe the purpose of the Investment Policy Statement
? Write a brief description of your client.
? This section should have a review of the clients balance sheet and
investable assets, their current work status, desired retirement date and
Step 2. Describe your client’s goals and objectives.
? Goals – Express your clients goals in qualitative terms, such as, wishing to maintain
their current standard of living through retirement, paying for a childs college
education, or to leave something to their children after passing.
? Risk Tolerance
o Complete a Risk Profile on behalf of your client.
o Write a brief summary of the results of your clients questionnaire. Include
responses to questions that you think are significant.
? Return Objective – Your clients return objective should be stated in terms of an
absolute or a relative percentage. Make sure your return objective is consistent with
your clients risk tolerance.
Step 3. Identify your clients investment constraints.
? Time Horizon State how long your client has until retirement and/or how long they
expect to be retired.
? Liquidity State whether your clients emergency fund is appropriate and how much
should be kept in liquid reserves.
? Income Tax Considerations
? Comment on whether your client is in a low, medium or high tax bracket and
whether taxes will be considered in their investment policy.
? Unique Needs and Circumstances Include your clients concerns or personal
Refer to Chapter 2 of the text for further information on the process of creating an investment
Purchase answer to see full
Why Work with Us
Top Quality and Well-Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
Professional and Experienced Academic Writers
We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.
Free Unlimited Revisions
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.
Prompt Delivery and 100% Money-Back-Guarantee
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.
24/7 Customer Support
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
Admission Essays & Business Writing Help
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.