Case Study: Sarah’s First Investment Portfolio

Case Study: Sarah’s First Investment Portfolio

Profile

• Name: Sarah Lee

• Age: 29

• Occupation: UX Designer

• Annual Income: $60,000

• Goal: Buy a home in 7 years

• Target Amount: $65,000 for down payment

• Monthly Savings: $550

• Risk Tolerance: Moderate

• Investment Knowledge: Beginner

Step 1: Defining the Goal

Sarah wants to save $65,000 over 7 years. With $550/month saved and assuming a 5–6% average annual return, she’s on track.

Step 2: Portfolio Allocation

Based on her moderate risk tolerance, Sarah's starting allocation looks like this:

Asset ClassAllocationExample InstrumentsGlobal Equities60%Vanguard Total World ETF (VT)Intermediate Bonds30%iShares Core US Aggregate Bond (AGG)Cash / Money Market10%Fidelity Government Money Market Fund

Step 3: Investment Plan

Sarah invests through a low-cost robo-advisor platform. Her key actions:

• Sets up automatic monthly contributions of $550

• Chooses a taxable brokerage account

• Rebalances annually to maintain 60/30/10 mix

Step 4: First Year Review

After 12 months:

• Her portfolio grows 6.2%

• Equities rise to 65% due to tech rally

• She rebalances back to 60/30/10

• She increases contributions to $600/month

Takeaways for Beginners

• Set time-bound goals to guide investment strategy

• Diversify across global stocks and safe bonds

• Rebalancing keeps risk in check

• Consistency beats timing, automate and remain invested