Which of the following best describes the primary goal of a strategic asset allocation strategy?

Question: Which of the following best describes the primary goal of a strategic asset allocation strategy?

Answer options: ✅ To achieve a long-term target asset mix that reflects the investor's risk tolerance and return objectives.

• To make short-term adjustments to the asset mix based on market anomalies and economic forecasts.
• To concentrate investments in a single asset class expected to outperform in the near future.
• To minimize transaction costs by maintaining a static portfolio composition indefinitely.

Correct answer: To achieve a long-term target asset mix that reflects the investor's risk tolerance and return objectives.

Explanation: Strategic asset allocation focuses on establishing a long-term asset mix that aligns with an investor's fundamental risk and return profile, irrespective of short-term market fluctuations.