Question

Andre finished school about a year ago and has been working full-time for 8 months. He is still living with his parents but is looking to move out and buy his own condo. He wants to move out in 5 years and needs to save $45,000 for the down payment. He can save $400 / month. He has been saving in an RRSP account and it has a current balance of $12,000. He stopped making contributions to this account because his employer provides a Group RRSP. Andre makes contributions from his pacheque directly in the amount of $100 and his employer matches the contribution at a rate of 50%. He qualifies as a first time home buyer.

identify:

a)     Investment goal

b)     Type of investment account recommended (i.e., RRSP, TFSA, RESP, non-registered, etc.)

c)     Asset allocation of the portfolio and why this is appropriate

d)     Other aspects you would need to consider that are not specifically noted

Answer 1

A) Investment Goal :

Goal: Purchase own Condo

Duration : 5 Years

Amount Needed: $45000

B)Type of the Account:

Investment Account Recommended :MUTUAL FUNDS & BONDS

C)Asset Allocation:

Amt Required : $45000

Save - $400/month savings

Already Have: $12000(RRSP A/C)

Investment- Bonds- $200 Monthly(Invested)

Mutual Fund- $200 Monthly (Invested)

Amt = 12000- Saving

17936 - Mutual Fund (15 % Return)

14402 - Bond Return (7% Return)

= 45538

As Risk Profile is not Described we have Suggested 50% Debt + 50% Equity which would Provide The Amout Needed For Down Payment.

D)Other Aspect Need For Consideration:

- Risk Profile oF Andre which help us to understand how much Risk He Can Take