Financial Planning Term Paper

Excerpt from Term Paper :


For my portfolio, obviously there are certain stipulations that limit my choices, namely the $10,000, which is a pretty big constraint. I thought I would start with the shares. I went with Brocade Communication Systems, which trades as BRCD on Nasdaq. This company makes and sells networking hardware and storage solutions. The current market price is $9.72 (MSN Moneycentral, 2014). I will be buying 200 shares, which gives us a price of $1,944.

The option is going to be call options on Starbucks. The expiry will be October 18, 2014. The strike price is $80, which has an ask of $1.25. The current price of Starbucks is $70.15 so the time value is presently $1.25 (MSN Moneycentral, 2014). The total cost of this is going to be 1.25 * 500 = $625.

The time horizon of this portfolio is long, since this is for my retirement. Therefore I can undertake a fair amount of risk. That will be reflected in my mutual fund selection. I will select the Fidelity Growth Company fund, which is growth-oriented equity, and gets a five-star rating from Morningstar.

With respect to the corporate bond, I went for something that would pay me a coupon in the next six weeks -- I understand that is built into the price but I figured it would feel good. I took $3,000 in the AT&T 15-May-2038 maturity, which pays a coupon of 6.4% (of which I will receive 3.2% on May 15th). This is still investment grade, and I have no real reason to fear that AT&T is going to default, despite its A rating. The current price on this bond is 118.66. I want 25% in bonds for this portfolio, so I will buy

All told the portfolio…

Sources Used in Document:


Morningstar. (2014). Fidelity Growth Company. Retrieved April 21, 2014 from

MSN Moneycentral: Starbucks. Retrieved April 21, 2014 from

MSN Moneycentral: Brocade Communication Systems. Retrieved April 21, 2014 from

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