Choose wisely. There is only one correct answer to each question.
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1.
In general, how should investors who are funding long-term goals allocate their assets?
Start heavy with high-quality stocks, then gradually shift more into safer securities over time. A portfolio that consists entirely of cash and short-term bonds will exhibit very few fluctuations, which can provide peace of mind and may be appropriate for very short-term goals, but not for long-term goals. Over time, it will get eaten alive by a portfolio that includes a stock component.
2.
Why does budgeting still matter after you have stopped saving for retirement?
You may need to adjust your spending rate at times during retirement. Especially during market downturns.
3.
Asset allocation means _______.
Dividing your portfolio among stocks, bonds, and cash investments. Although there is some truth to the other options, this one is the basic definition of asset allocation.
4.
Once you're retired, you won't need to adjust your spending rate.
False. Market downturns and unexpected expenses can necessitate adjusting your spending rate.
5.
What activity forms the base of the investment pyramid?
Setting goals. The other activities will be greatly influenced by your goal setting.
