In the first part of this series on core satellite investing, we looked at how two investors in their 20s and 30s could create their own core satellite portfolios to fit their unique goals.
This time round, we take a look a David, a lawyer in his 40s, as a hypothetical case study that could serve as inspiration for your own core satellite strategy. This example is for illustration purposes only and your asset allocation should always be based on your own financial needs and objectives.
Case study: David (40s)
David is a high-flying lawyer with two teenage children. In his 40s, he’s thinking ahead to retirement now that his children are in university. At the same time, he’s planning to purchase a second property in a few years.
Goal 1: Down payment ($800,000) for a second property in 5 years
Solution: Syfe Core Balanced
Rationale: With a shorter time frame of 5 years, the balanced mix of equity and bond ETFs within Core Balance will help him manage risk while still achieving a moderate level of potential returns over time.
Plan: Lump sum of $500,000 and $1,000 / month for 5 years to achieve forecasted returns of $825,999
Goal 2: A comfortable retirement nest egg of $2 million in 20 years
Solution: Syfe Core Growth
Rationale: David is willing to take on higher risk for higher potential returns over the long term. His Core Growth portfolio is weighted more heavily to equity ETFs, but with some bond and gold ETFs to cushion against volatility
Plan: $2,500 / month for 20 years to achieve forecasted returns of $2,134,083
David also wants to have additional passive income of $1,000 a month when he retires. Syfe REIT+, which has a forecasted dividend yield of 5.1% in 2021, fits his needs. Based on the forecasted dividend yield, he will need a portfolio value of $240,000 to generate dividend income of $1,000 every month.
Build your own core satellite portfolio
Here’s a quick recap of what David’s core satellite strategy could look like, and the investing plan he has created to achieve his goals.
Interested to create your own core satellite strategy? Explore your own portfolio projections on our website and get started here.
For illustrative purposes only. To forecast future returns we use sophisticated techniques such as forward-looking Monte Carlo simulation to determine a realistic range of return.
Past performance does not guarantee future results, which may vary.
The sample asset allocations and return forecasts have inherent limitations and no representation is being made that any investor will, or is likely to achieve, performance similar to that shown.
Your asset allocation should be based on what you feel best fits your goals and risk tolerance.