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?

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D. Rebalancing the portfolio is a suitable strategy for the investor. Rebalancing the portfolio allows the investor to adjust the allocation between stocks and bonds to align with their income needs and risk tolerance as they approach retirement. This strategy can help ensure a more stable income while managing investment risk. A) Dollar-cost averaging Dollar-cost averaging is an investment strategy that involves regularly investing a fixed amount of money, regardless of market conditions. While it can help mitigate the effects of volatility over time, it does not directly address the investor's immediate need for additional monthly income as they near retirement, making it less suitable in this context. B) Hedging the portfolio Hedging is a strategy used to protect investments from potential losses by taking an offsetting position in a related asset. While it can reduce risk, it may not provide the necessary income the investor requires as they transition into retirement. Therefore, it is not the most effective approach for addressing the investor's immediate income needs. C) Liquidating the portfolio Liquidating the portfolio involves selling off the investments to convert them into cash. This strategy could provide immediate funds, but it would eliminate the potential for future growth and income generation from remaining investments, which is typically not advisable as one approaches retirement. D) Rebalancing the portfolio Rebalancing the portfolio entails adjusting the allocation between stocks and bonds to maintain the desired investment strategy. This approach can free up funds from stocks to increase bond holdings, which typically offer more stable income, thus directly addressing the investor's need for additional monthly income during retirement. Conclusion Rebalancing the portfolio stands out as the most appropriate strategy for the investor nearing retirement. By adjusting the asset allocation, the investor can better align their investments with their income requirements while managing risk. This strategy helps maintain a balanced approach to investment, ensuring the portfolio can support the investor's financial needs during retirement.

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?

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