Sarah, a 30-year-old high-income professional, is planning for retirement in 35 years. She has a high-risk tolerance and is comfortable with market fluctuations for higher long-term returns. Which asset allocation strategy would generally be most suitable for her current financial plan?

Question: Sarah, a 30-year-old high-income professional, is planning for retirement in 35 years. She has a high-risk tolerance and is comfortable with market fluctuations for higher long-term returns. Which asset allocation strategy would generally be most suitable for her current financial plan?

Answer options: ✅ A predominantly growth-oriented portfolio with a significant allocation to equities.

• A balanced portfolio with an equal split between equities and fixed-income investments.
• A conservative portfolio focused on capital preservation with a high allocation to fixed income and cash.
• A portfolio focused solely on income-generating assets like preferred shares and bonds.

Correct answer: A predominantly growth-oriented portfolio with a significant allocation to equities.

Explanation: Given Sarah's young age, long time horizon, and high-risk tolerance, a growth-oriented portfolio with a significant allocation to equities is generally most suitable. This strategy aims to maximize long-term capital appreciation, aligning with her retirement goals.