Yanni and Joanna require some investment advice. Joanna has sold $660,000 worth of Woolworths Limited (WOW) shares that she inherited late previous financial year. She has $616,000 remaining after paying capital gains tax, which she has deposited in a cash management account. The couple would like you to practice a formal investment plan to help them appropriately invest this money. During your discussion, you gather the following information:
Questions You should prepare an investment plan proposal for your clients. You are needed to provide: a) A short but comprehensive discussion of investment return, risk and diversification. b) Suggested non-superannuation strategies with overall asset allocation table(s). c) Suggested investment products to execute the agreed asset allocations. While you will not be assessed on your specific brand choices, you will be assessed on the appropriateness of the strategies and types of products recommended. d) Assumptions that you make in the plan, including justification of those assumptions. Credit will be deducted where this is not given or the assumptions change the specifications of the assignment. e) Advantages, drawbacks, justifications and risks of the strategy and product recommendations you make.