From an investing standpoint, stage in life has a lot to do with willingness to bear the risk of various investments. Generally, as an investor moves from wealth accumulation years to wealth preservation years, their portfolio should rotate from a higher risk ________ to a more moderate risk ________ to a lower risk ________.

Question

Quizplus · Accepted Answer

The correct sequence for an investor moving from wealth accumulation to wealth preservation years is from a higher risk equity portfolio, to a more moderate risk balanced portfolio (which includes both stocks and bonds), to a lower risk conservative portfolio (which focuses on preserving capital, often with a higher allocation to fixed income). This progression reflects a decreasing willingness to bear risk as the investor ages.

From an Investing Standpoint, Stage in Life Has a Lot