An investor is nearing retirement and holds 90% of his investment portfolio in stock and 10% in bonds and projects that he will need additional monthly income. The investor's registered representative may suggest which of the following strategies to help the investor achieve their goals?

Question

Certilyst · Accepted Answer

D Rationale: Rebalancing the portfolio is a suitable strategy for the investor nearing retirement. This approach involves adjusting the proportions of stocks and bonds in the portfolio to align with the investor's risk tolerance and income needs as they transition into retirement.

Dollar-cost averaging (A) is incorrect because it focuses on investing a fixed amount regularly, which does not directly address the need for additional monthly income.

Hedging the portfolio (B) is not the best option, as it typically involves using financial instruments to protect against loss rather than generating income from current investments.

Liquidating the portfolio (C) is also inappropriate, as this would mean selling off investments entirely, which is not a sustainable strategy for generating ongoing income during retirement.

Securities Industry Essentials Exam 100 Pass Rate

An investor is nearing retirement and holds 90% of his investment portfolio in stock and 10% in bonds and projects that he will need additional monthly income. The investor's registered representative may suggest which of the following strategies to help the investor achieve their goals?