Question

Sam is 60 years old and recently started relying on cane for last few years. Sam thinks he may need long-term care services some day in the future. His net worth is around 1 Million and he receives $60,000 per year in a pension. He considers himself to be in excellent health and has never had a serious health situations. Food Sam eats are fairly healthy and includes lots of whole grain and nuts. He also exercises regularly. What is your recommendation to Sam?

Answer 1

Hello,
As per the situation of old man given in the question it was clearly mention that he was ability to take risk.
His net worth is $1 million and he has receive pension of $60000 per year he has sufficient fund to take risk. Sam has to invest most of the funds around 60% in the Real estate and small cap equity stocks, so they will provide good return in future.
He has to check the correleation between the Private sectors and the Equity sectors before investing into it.
And rest of the fund should be invested into say 10% is invested into large cap stocks (bluechip stocks) because they are less riskier and 30% amount invested into FD or into bank so they are more liquid and they provide Interest on a regular basis so that there expenses can be done without any suffer.
Note- Percentage of amount invested in market may be vary while making a Investment portfolio statement.

I hope this clear your doubt.

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