A couple in their early 30s, Charles and Sherry Ashcroft recently inherited $90,

Question

A couple in their early 30s, Charles and Sherry Ashcroft recently inherited $90,000 from a relative. Charles earns a comfortable income as a sales manager for Transportation Logistics, Inc., and Sherry does equally well as an attorney with a major law firm. Because they have no children and don’t need the money, they’ve decided to invest all of the inheritance in stocks, bonds, and perhaps even some money market instruments. However, because they’re not very familiar with the market, they turn to you for help

1.Construct an investment portfolio that you feel would be right for the Ashcrofts and invest the full $90,000. Put actual stocks, bonds, and/or convertible securities in the portfolio; you may also put up to one-third of the money into short-term securities such as CDs, Treasury bills, money funds, or MMDAs. Select any securities you want, so long as you feel they’d be suitable for the Ashcrofts. Make sure that the portfolio consists of six or more different securities, and use the latest issue of The Wall Street Journal or an online source such as http://finance.yahoo.com to determine the market prices of the securities you select. Show the amount invested in each security along with the amount of current income (from dividends and/or interest) that will be generated from the investments. Briefly explain why you selected these particular securities for the Ashcrofts’ portfolio.

AN INVENTORY OF INVESTMENT HOLDINGS Name(s): Date: Type of
Investment Description of
Investment
Vehicle Date
Purchased Amount of
Investment
(Quote—$ Amount) Cumulative Amount of
Annual Income
from Dividends,
Interest, etc. Latest
Market Value
(Quote—$ Amount) Comments/
Planned
Actions

Explanation / Answer

INVENTORY OF INVESTMENT HOLDINGS Name(s): Ashcroft Date: 11/16/2015 Type of Description of Date Amount of Cumulative Amount of Latest Comments/ Investment Investment Purchased Investment Annual Income Market Value Planned Vehicle (Quote—$ Amount) from Dividends, (Quote—$ Amount) Actions Interest, etc. Equity Sun Edison INC 11/16/2015 $10,000 $4.93 Equity General Electric 11/16/2015 $15,000 $30.28 Equity Vipshop Holdings 11/16/2015 $10,000 $13.60 Equity Bank of America Corporation 11/16/2015 $10,000 $17.20 US- 3 month T bills Three month treasury bill 11/16/2015 $30,000 0.1% yield Bonds 10 years bonds 11/16/2015 $15,000 2.26% yield Six different Securities are selected to create a well balanced portfolio. As the Ashcrofts are in early 30's so they can invest half of their mony $90000 in stocks and 33% of their money into treasury bills and rest in 10 year bond. This portfolio is well balanced.

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