1. Mr. and Mrs. Mild are both 55 years old, and are anxiously waiting to retire in about 10 years. They would like to lower their exposure to riskier investments as they approach retirement. They decide to sell all their growth generating investments and instead purchase only income generating ones, such as bonds and bank deposits.

Is the decision they made a wise one?

A. Yes. They dont have a high risk tolerance, so its important for them to be very cautious and avoid as much risk as possible by selling the riskier stocks (a.k.a. growth stocks) well before retirement.

B. Yes. As they approach retirement IRA accounts stop becoming tax-free on growth stocks, so its important to sell these stocks before they need to start paying high taxes on them.

C. No. Without growth stocks they will have a hard time keeping pace with inflation.

D. No. They should keep their growth stocks until they retire, and only then sell all their growth stocks and purchase only income generating investments.