Recommendations & StrategiesQuestion 71 of 100
A client nearing retirement wants to gradually reduce portfolio risk. A glide-path approach would:
a.Increase equity exposure each year
b.Shift the allocation progressively toward more conservative assets as the target date approaches
c.Keep the allocation permanently fixed
d.Move fully into a single stock
Explanation
A glide path gradually reduces equity exposure and increases conservative holdings as a target date, such as retirement, nears. This aligns risk with a shortening time horizon and rising need for capital preservation. Target-date funds commonly use this method.
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