introducing the 2007 retiree portfolio

I've been tasked to manage a retiree's portfolio on a trial basis. Note that this is with real money and, yes, for a retiree, frankly this isn't much cash at all. The following is a very rough framework for the portfolio.

The assets below were once spread between so many accounts and brokerages that, over the course of nearly one year, I was "discovering" a new account every month. I'll just say this: this person had at least 5 separate Roth IRA accounts. Sure, I can understand justifiable reasons for opening up 5 separate Roth IRA accounts, but not if the reason is so the account-openin' sales rep can pocket some commission or kick-back from the brokerage house.

All values are in thousands.



The goal is to grow the portfolio value by at least 10% CAGR (compound annual growth rate) to $138,600-- minus variances from actual, final principal values above, along with various fees and taxes, along with losing >23 days since the start of 2007. Unfortunately, until all assets and finally transferred the way we've planned it, I'm not exactly how many days since the start of 2007 is "lost" as potential opportunity cost until everything is finally settled. Another factor is that not all of the principal will be in equity and bond allocations-- there might be a small percentage stashed into a money-market fund.

Additionally, principal value will be used to purchase whatever funds I've allocated in a staggered schedule, so there might be some slight, hopelessly-complex calculations that would factor this staggering in-- it might be much ado about nothing, but I suppose one method of systematically doing so is by documenting purchase lots.

Finally, for future back-testing purposes, the projected 5-year asset value of this portfolio will be a hair > $200,000. The projected 10-year asset value of this portfolio will grow to nearly $330,000.

It appears starting principal will be lower than expected for now. Requesting a disbursement from Brokerage2 has stalled for now since they're not a big outfit. Transferring an IRA requires an in-person visit to a national brokerage house (otherwise a "medallion authorization" is required-- no notaries, only a certified bank certification of signature) which presents its set of logistical challenges. And finally, we're awaiting the CD maturation in late February '07.

Our starting basis as of the middle of January '07 is roughly $110K. Once allocations and locations are finalized, an update presenting the equity / fixed income breakdown will allow you to see where future return projections are headed.

Lastly, I'm still testing out various portfolio strategies. I'm hoping by the time the CD matures I'll have a strategy primed for execution. Stay tuned.