Report and Investment Suggestions to the Client

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Current Holdings and Risk Levels

The client is inclined to define his risk level as rather moderate, and he allows accepting possible aggressive investment risks. Having analyzed the client’s holdings and investment decisions, it is important to state that the risk level is really moderate because of the great diversification in investments. However, the significant reliance on stocks can be discussed as a risky strategy for the client.

Tom has diversified his investments and chose to allocate to different classes of assets, including stocks of profitable and leading companies, bonds dependent on government debts, the retirement fund, and gold bullions. This decision leads to moderate risks because the client eliminates threats associated with the negative performance of companies or market changes. At the current stage, the followed portfolio is rather balanced, but it needs adjustments to be relevant for the future.

Changes for the Client’s Portfolio and Future Investments

Although the client plans to work during the next 10-15 years, the retirement plan, as well as the security of assets, can be assumed as priorities for the client. Therefore, the changes in the portfolio and investments can be proposed to update the portfolio according to the market situation and to increase its security.

Recommendations for Changing Portfolio

Recommendations to diversify the portfolio and improve the asset allocation include the following points:

  1. The client should further diversify the portfolio and invest in exchange-traded funds (ETFs). The reasons for such suggestion are that the client wants to follow the moderately aggressive strategy, and ETFs are riskier than other funds in terms of timely returns; still, ETFs provide higher payments in comparison with other funds; and there are tax advantages because taxes are paid within the fund.
  2. The client needs to shift the priority from stocks to bonds, and he needs to invest in more secure bonds like municipal bonds. The reason is that it is important to decrease the volatility of investments to have stable secure payments during the next years.
  3. In spite of the fact that the client plans to work during the next 10–15 years, it is important to minimize financial risks associated with possible retirement and to revise the allocation of assets. Currently, the client’s asset allocation can be presented with the following per cents:
  • 67% are spent on stocks;
  • 17% are spent on T-bonds;
  • 11% are spent for retirement fund;
  • 5% are in gold bullion.

Although blue-chip stocks are selected, the portion of stocks needs to be reduced because of high risks, and the portion of secure bonds needs to be increased.

Asset Allocation with References to Future Investments

Depending on the client’s age and priorities, it is possible to propose the following asset allocation:

  1. 40% in stocks because of their profitability and rather high risks;
  2. 22% in T-bonds because of their security;
  3. 12% in ETFs because of high interest;
  4. 12% in the retirement fund;
  5. 7% in gold bullion because of an opportunity to use this asset as soon as possible;
  6. 7% in municipal bonds because of tax conditions and security.

Approaches to Lower Tax Liability

Depending on the proposed portfolio, the easiest way to lower the client’s tax liability is to focus on the most advantageous bonds and funds in terms of associated taxes. Proposed ETFs are tax advantageous, and they contribute to decreasing the overall tax liability. Proposed municipal bonds are tax-free. Increasing the percentage of T-bonds, the client is expected to pay only federal taxes. As the client’s profit-sharing plan is tax-sheltered, the overall tax liability decreases automatically with changing the proportion of investments.

The Portfolio Value in 15–20 Years

The proposed variant of the portfolio can be discussed as secure and focused on possible changes in the retirement plan as well as on risks that the retirement resources can become needed before 2030, as it is according to terms of a target-date retirement fund. During the next 15 years, the client will receive revenues from the most secure bonds as well as from stocks. In 15 years, the proposed portfolio will also be working because the reliance on stocks is decreased to the minimum, and this option can be assumed as desirable for the client. Thus, in 15 years, slight adjustments can be made regarding the proportion of stocks and T-bonds to increase the number of the latter.

Suggestions for Improving the Portfolio of Client’s Mother

Depending on the age and needs of the client’s mother, it is important to focus on the most secure investment suggestions. The observed income does not allow large investments and bonds. Therefore, it is possible to choose money-market funds because they guarantee short-term as well as regular returns. Although these returns are lower in comparison with the other funds, the level of security in these funds is very high. Another suggested option is investing in municipal bonds with low investment payments, quick returns, and with a high level of safety.

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"Report and Investment Suggestions to the Client." BusinessEssay, 27 Nov. 2022,


BusinessEssay. (2022) 'Report and Investment Suggestions to the Client'. 27 November.


BusinessEssay. 2022. "Report and Investment Suggestions to the Client." November 27, 2022.

1. BusinessEssay. "Report and Investment Suggestions to the Client." November 27, 2022.


BusinessEssay. "Report and Investment Suggestions to the Client." November 27, 2022.