Mueller Case
INVESTMENT POLICY STATEMENT
Objectives:
Return Requirements: * Tax minimization – a continuing collateral goal * Inflation adjustment enhancement of investments- real growth of capital with possible extra return if possible.
Risk Tolerance: * Investment risk – very low risk 1. The Muellers have been managing their own investments and are familiar with risk but may not understand volotiliity completely due to their high portion of volatile stocks within the portfolio 2. Want to provide for their daughter’s college education 3. Very high tax bracket (30% on income and 20% on net realized gains)
Constraints:
Time Horizon: The Muellers are relatively young and have still a lot of time to work and likely saving for retirement is in their agenda. The main goal is to provide for their daughter’s education and expenses associated with it. This goal would be considered long-term but is relatively short in comparison to possible saving for retirement.
Liquidity Requirement: There is an ongoing stream of income available. Their may still be some liquidity needs in order to provide for the expenses of the college education along with life expenses associated with both The Muller’s and their daughter.
Taxes: The family is in the highest of brackets. Future investments should take that into account on an indefinite basis. Tax-sheltered investments should be considered and will likely benefit the family more than high yields that are taxable.
Legal and Regulatory: The Muellers would like to monitor their own investments, so their investments are generally only governed by state law.
Unique Circumstances: Past unsuccessful investments of $100,000 can be used to offset tax distributions on net realized gains. Most important aspect and is unique to the saturation, Incoming expenses of $90,000 for the first year of college and then consistent four more years of $40,000 of college
Objectives:
Return Requirements: * Tax minimization – a continuing collateral goal * Inflation adjustment enhancement of investments- real growth of capital with possible extra return if possible.
Risk Tolerance: * Investment risk – very low risk 1. The Muellers have been managing their own investments and are familiar with risk but may not understand volotiliity completely due to their high portion of volatile stocks within the portfolio 2. Want to provide for their daughter’s college education 3. Very high tax bracket (30% on income and 20% on net realized gains)
Constraints:
Time Horizon: The Muellers are relatively young and have still a lot of time to work and likely saving for retirement is in their agenda. The main goal is to provide for their daughter’s education and expenses associated with it. This goal would be considered long-term but is relatively short in comparison to possible saving for retirement.
Liquidity Requirement: There is an ongoing stream of income available. Their may still be some liquidity needs in order to provide for the expenses of the college education along with life expenses associated with both The Muller’s and their daughter.
Taxes: The family is in the highest of brackets. Future investments should take that into account on an indefinite basis. Tax-sheltered investments should be considered and will likely benefit the family more than high yields that are taxable.
Legal and Regulatory: The Muellers would like to monitor their own investments, so their investments are generally only governed by state law.
Unique Circumstances: Past unsuccessful investments of $100,000 can be used to offset tax distributions on net realized gains. Most important aspect and is unique to the saturation, Incoming expenses of $90,000 for the first year of college and then consistent four more years of $40,000 of college