Strategic asset allocation is usually done:
A)once every few years,establishing a long-run or strategic asset mix.
B)using Monte Carlo simulation to identify a range of outcomes for various asset mixes.
C)the life-cycle concept.
D)a market timing strategy.

Question

Quizplus · Accepted Answer

Strategic asset allocation is typically done once every few years to establish a long-term or strategic asset mix that aligns with an investor's goals, risk tolerance, and investment horizon. This approach is aimed at achieving the optimal balance of risk and return over the long term, rather than trying to time the market or make short-term tactical bets on specific assets. Monte Carlo simulation and life-cycle concepts may be used in conjunction with strategic asset allocation, but they are not the primary focus. Market timing strategies, on the other hand, involve trying to anticipate short-term market movements and adjust portfolio allocations accordingly, which is generally less effective than a long-term, strategic approach.

Strategic Asset Allocation Is Usually Done