Fund the retirement money requirements

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Reference no: EM131026924

1) The Tilson's Focus Fund (TILFX) and Tilson's Dividend Fund (TILDX) are two funds that have positive alpha for a long period of time. TILFX has positive alpha of 80 basis points per month while TILDX has alpha of 52 basis points per month (Source: business insider). As the names suggest, TILFX invests in some selected high growth stocks of consistent good performance and TILDX invests in high dividend yield stocks. If you had to choose a fund, explain which one you would buy and why?

2) What reasons would make you sell this fund?

3) Consider the following information on 2 investors:

Paul and Susan would be requiring funds to fund their retirement. Presently they are having annual expenses of $ 150,000. The expected inflation rate is 3% and their growth objective is 1%. The current household income is $ 260,000 ($ 170,000 + $ 90,000). Of the annual income required after the age of 65, $ 85,000 p.a. can be expected to be received from the pension. The other part of the money required at retirement can be funded by investing the salary over and above the current expenses along with the given portfolio for the next 8 years until the retirement. These investments will earn return and will fund the retirement money requirements.

Do you think this fund would be appropriate for our clients The Harrisons? Why or why not?

Reference no: EM131026924

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