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Angel and Marie Perez inheritance: investment tools

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Angel and Marie Perez own a small pool hall. They enjoy running the business, which they owned for 3 years. Angel saved for nearly 10 years to buy this business, which they own free and clear. The income from the pool hall is adequate to allow Angel, Marie and their 2 children to live comfortably.

Recently, Angel and Marie were notified that Marie's uncle had died and left them a portfolio of stocks and bonds with a current market value of 300,000. They were elated to learn of their good fortune but decided it would be best not to change their lifestyle as a result of this inheritance. Instead they want their newfound wealth to provide for their children's college education as well as their own retirement. They decided to keep these funds invested in stocks and bonds. Given the amount of money involved, Angel was not too concerned with the information costs, rather he wanted the best information he could get a reasonable price.

a) Explain what role the Wall Street Journal and Barron's might play in meeting Angel's needs. What other general sources of economic and current event information would you recommend to Angel? Explain.

b) How might Angel be able to use the services of S&P, Mergent and the Value Line Investment Survey to learn about the securities in the portfolio? Indicate which, if any, of these services you would recommend and why?

c) Recommend some specific online investment information sources and tools to help Angel and Marie manage their investments.

d) Explain to Angel the need to find a good stockholder and the role of the stockbroker could play in providing information and advice. Should he consider hiring a financial adviser to manage the portfolio?

e) Provide Angel a summary prescription for obtaining information and advice that will help to ensure the preservation and growth of the family's newfound wealth.

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Solution Summary

The solution examines Angel and Marie Perez inheritance. Investment and management tools are examined.

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ANSWERS

Question A
Wall Street Journal and Barron's provide relevant information on the stocks and bonds which are included in the portfolio they inherited. Moreover, these two publications also provide information on other stocks and bonds and also news that impact the value of the companies which issued these stocks and bonds.

Angel might also want to regularly read reports published the by Federal Reserve and other government agencies, analysts forecasts and disclosures and reports made by the companies he is interested in for general sources on the economy and current events information. The Federal Reserve regularly publishes discussion on current economic trends and opinions on how the economy will be.

Question B
The S&P, Mergent and Value Line Investment Survey like the Wall Street Journal and Barron's provide information ...

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