John Smith, an associate in your firm, has asked you to help him establish a financial plan for his family's future. John is 38 years old and has been with your firm for two years. Anne, his 42 -year-old-wife, is employed as a psychologist for the local school district. They are childless now but plan on adopting a child in two years. Both John and Anne have little or no knowledge of complex financial instruments.

John told you that he and Anne have accumulated $10,000 in savings and recently inherited $50,000 in cash. They believe they can save at least $5,000 yearly. They are in a 30% income tax bracket and both have excellent career opportunities. They are eager to develop a financial plan, and understand that it will need to be periodically adjusted as their circumstances change.
Identify and describe an appropriate set of investment objectives and constraints for the Smith's, and recommend a stock/bond mix that is based on these objectives and constraints.