You have just inherited $250,000 and you can only invest the funds for about 10 years or more in non-registered investments

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You have just inherited $250,000 and you can only invest the funds for about 10 years or more in non-registered investments.

There are two Types of investments

1. Registered Investments (tax-deferred or tax-free)

• RRSPs
• TFSA
• RRIFs
• RESPs
• LIFs

1. Non-Registered Investments

• Income generated is taxable on a yearly basis

Based on your own personal circumstances, such as the following below, please invest the funds appropriately, within the three asset classes.

KNOW YOUR CLIENT (KYC)

• Risk Tolerance
• Investment Objectives
• Investment Knowledge
• Personal Information

Perform the following tasks below:

 

1.     make a ÍÍ. Then, devise your strategic asset allocation based on your risk tolerance. You will need to include an asset allocation questionnaire.

Cash              = Money market, T-bills, High Interest Savings Account  

Fixed Income = GIC, Bonds/Debentures (Bond & Mortgage mutual Funds) PPNs

Equities         = Stocks/Shares, ETFs, Hedge Funds, Crypto-currency

 

Cash              = 10% ($25,000)

Fixed Income = 60% ($150,000)

Equities         = 30% ($75,000)

 2.     Invest a minimum of 10 securities in total, spread amongst the three asset classes. You must have at least 1 investment in each asset classes.

o  You can purchase more than 10 securities if you like, but at least 10 securities.

o  Provide the specific names of the investments you are choosing and not a generic name.

§ For example, RBC Canadian Dividend Fund, Apple common shares, to name a few)

o  The investments could be any investment vehicles we have learned thus far in the CSC Volume 2

§ Common shares, preferred shares, bonds, mutual funds, closed-end funds, principal protected notes (PPNs), indexed-linked GICs, segregated funds, hedge funds, to name a few.

§ The investments can be Canadian, US, or foreign investment vehicles

3.     Provide an explanation as to why you chose each investment with either a fundamental analysis or technical analysis. You may also provide an economic outlook to validate your investment choices.

o  For example, if your investment decisions are based on fundamental analysis, then maybe provide:

§ P/E ratios, EPS, Current Ratio, Dividend Yield, to name a few.

o  If choosing mutual funds, segregated funds, and hedge funds, you may provide the following:

§ Rate of return, (YTD, 1 year, 3 years, 5 years, and 10-year rate of returns)

o  For example, if your investment decisions are based on technical analysis then maybe provide patterns that you may have identified (i.e., Head and Shoulders).