Financial Portfolio of Customers Aged 50—60

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Financial Portfolio

of Customers Aged 50—60

Prepared By:

Prepared for:

FIN 435


This is a financial portfolio prepared by our group for the appointed customers. In this paper, we will introduce the customer information first. Second we describe the core idea and investment target of the portfolio prepared for them. And then we will show the portfolio we compared for them. The assets allocation will show as a Pie chart. Pie chart, line chart and tables are used to illustrate our suggestion. At the same time we can do some compare to show what products we do and do not choose as well as why. We will show that this is a reasonable and well-prepared portfolio for the appointed customers.

Customer Information

The portfolio is prepared for the people aged 50 to 60. The customers are in families with children. They are richer families, the salary of them are higher than other kinds of families. Meanwhile, their expense are high, one significant expense is the college tuition fee of the children. The investors face the nearly retirement, so they want to earn money to cover the retirement life.

Policy Statement

In this part we describe the core idea of the portfolio. It is the main thought of the portfolio. For the 50 to 60 years old rich customers, our core idea of their investment is safety, security, and less risk. In the other words, they are risk averse. Also they do not require a high liquidity. The reason will be described as following:

  • Their accumulated assets are higher than the people in other age group. They do not need to earn more money in a shorter period with higher risk.
  • The customers will have a big expense as children tuition fee, so they prefer to in a safety investment and keep less change to loss money.
  • As the customers face the near retirement, we can gradually tip the balance toward the safer side of the customers’ portfolio.
  • The older people can accept less investment lose than younger people psychologically.

Assets Allocation

There is $100,000 invested in the portfolio. And our ogle is to earn 40% at the end of the investment period. The portfolio can be build up by 5 parts. They are cash, bonds, currency, stock, and future.

They are 5% as cash; its value is $5,000. The reason why we keep 5% in cash is that the family need keep money for emergency. However they are high salary families, they do not leave too much in cash.

20% is allotting as bonds, its value is $20,000. The reason why keep as much as $20,000 is that the bond is a safety investment way. It accord with the core idea.

20% is admeasured into currency; its value is $20,000. The currency market fluctuates smaller while frequently. It means that the loss is small and can be stop immediately.

40% in stock, it is worth $40,000. Stock market is the best market to earn money. With the well analysis our customers can earn money with less risk in the market.

And finally, 15% in future, it is $15,000. Future market has high risk, so we spend fewer shares in the market.

The pie chart below shows how the money spends in different parts:




















We suggest $20,000 invest into currency market. There are many choices in the currency market. The currency we want to add in the portfolio is that the exchange rate is keeping decreasing. We would like to spend more money because the currency investment earns more once principle is more. The currency we choose for the portfolio is Euro and Korean Own.

The percentage of the Euro and Korean Own is 60% and 40%; it means $12,000 invest into Euro and $8,000 invest into Korean Own. The reason why Korean Own investment is less than the Euro is that the moving range of Korean Own is smaller than Euro and it means investment on Korean Own may earn less money. We use a pay chart to show the scale of the two currencies investment.


The reason we choose Euro is that its exchange rate with the U.S. dollar keep decreasing in the last year and it has the decreasing trend. The illustration shows its one-year trend. Form the trend we can easily it is a decreasing one so that we are safe in the portfolio and we can earn money.

We prefer to do the short-term investment on the currency. The hold period is less than two weeks. We buy the currency when it began to fall and we keep it seven or more days, it depends on the trend and then sell it. We can earn money by this currency.

Korean Own

The situation and analysis are similar as Euro. As the analysis of Euro, we first show the one-year trend of the exchange rate. This is the reason why we choose this kind of currency.

Then we show the three months trend of the currency. It is the reason why we spend less money on Korean Own; it can help us earn less money. And it can also show how much we can earn in the investment.

Currency Model we do not choose

We do not choose the increasing exchange rate trend currency. The example shows here is Chinese dollar because the exchange rate between U.S. dollar and Chinese dollar is increasing since January 2014. The picture below shows the relationship of the two currencies in the last three months.


We will pay more attention in the future market. The reason is that future market can bring a huge profit for us. However, the profits come with a big risk, so we should decorate the risk. The way we use in the portfolio is buy more kinds of future rather than one kind. The future we will buy is silver, palladium, and gold in the metal market. In the softs future market, we will spend money on cotton, cocoa, and coffee. We do not invest into the energy market because it moves too frequently.

In the portfolio, we have $15,000 to invest. We allocate it as the following:

  • 10% invests in sliver. It worth $1,500
  • 10% invests in gold. It worth $1,500
  • 20% invests in palladium. It worth $3,000
  • 10% invests in U.S. cotton. It worth$1,500
  • 10% invests in U.S. coffee. It worth$1,500
  • 30% invests in U.S. cocoa. It worth$4,500























We spend 10% in the sliver future because the sliver has a small move range. In the other works, we can earn less in the sliver future. We will do both call and put option of the future. From the following chart we can see that the sliver has a continuous increase and then is a continuous decrease. We can buy sliver first and then sell it until it shows the decease trend. Or at the same time, we can buy put option. After the increase period, we can buy put option sliver in the market.


Why we buy gold in the future market is that it has a increasing trend. The future market of gold is not stable so we do not spend too much money here. We prefer do short period investment in gold market because it is not stable. We buy it once there is a increasing trend; and we sell it once there is a decreasing trend.


Palladium has a persistent increasing trend; and the moving range is bigger. Based on the two reasons, we buy as more as 20% in the palladium. In the portfolio we will do long period investment of the palladium. The following is the illustration of palladium.

U.S. Coffee

The U.S. coffee has an increasing trend, while its moving range is not big. It is that we cannot earn too much in the coffee future market. We will do the long run because of its keeping increasing. Following is a picture of its trend.

U.S. cotton

The U.S. cotton has a similar situation as U.S. Coffee. We may do the same percentage, same period of the two. Following is the illustration of the U.S. cotton. We can calculate the projected profits.

U.S. Cocoa

We spend 30% in the U.S. Cocoa future market. The first reason is that it has an increasing trend. Second is that it has a bigger moving range, it means that we can earn more in the investment. The third is that it’s decrease often less than its increase.


We suggest $40,000 to be invested in stock market being a secured investment with stable return and sustainability assurance. The stock options in this market are endless and in this regards. The reason being for such a heavy investment is the security and minimum risk. The stock investment option we selected are Davin Jones Limited (DJS) and Nuveen Investment Quality Municipal Fund, Inc NQM

The percentage of DJS and NQM is 50% and 50%, it means $20,000 in DJG and $20,000 in NQM. The reason for equal distribution of amount among two is to maximise the return in either way. The pie chart illustrate the ratio among two of them.


The reason we choose DJS is the progress shown in the past and the dividend payment. The price is also getting high as well as dividend. The chart of daily prices over 6 monthsfor securityDJS illustrates the trend in increasing price and second the decision of safe portfolio investment.

We prefer to hold the share for the future earnings as trend indicates its authenticity and increasing price which result in profit either way even if we wait for dividend or liquidate the share at market price.

The last dividend record is as follows


Div Amount

Ex Div Date

Record Date

Date Payable

% Franked


Further Information

















Nuveen Investment Quality Municipal Fund, Inc NQM

The NQM is being selected for its reputation and name in the market. It is considered one of the safest and high return investment. The movement is slow and sluggish but the final result always positive for investor.

The price and the volume traded history of last year is illustrated with the help of following graph

stock chart

We prefer to hold the shares of the company for long term benefit and the return would be positive. As shown in the chart the price is getting up from the beginning of this year and this trend shows the strong signal of continuity in the future.

The stock report is as follows

Stock Report Details

Issue Type

Common Stock



52 Weeks High


52 Weeks Low


Dividend Yield

6.63 %

Annual Dividend


P/E Ratio