Stock-Trak Portfolio Report

Yijing Yuan

Ghulam Sarwar

FIN 435

11 April 11, 2019

Investment Policy Statement (IPS)

This portfolio is designed for young investors who around 25 years old. The primary objective of this portfolio is providing a long-term and stable guarantee for the security of property Furthermore, using a total return strategy capturing interest and dividend income is the underlying secondary investment objective. The portfolio will target a semi-annual total return of 12% with a 5-year standard deviation less than 15. The target and semi-annually maintained asset allocation to achieve the risk and return goals for this investment strategy is 60% stocks, 35% bond and 5% cash. The portfolio is to be rebalanced a semi-annual basis at the beginning of each calendar year starting Jan 1, 2017. Using five years of statistical data, the investment holding period will be determined using effective boundaries, reviewed annually, and when assets become inefficient relative to peers, it will give investors an opportunity to choose whether to replace it or reduce asset investment. Fixed-income will account for 50% of the total portfolio, 20% of which will be invested in the S&P 500 Index and the remaining 30% will be invested in a long-term securities to obtain liquidity and security.