Strategic asset allocation is a long-term approach to portfolio management where a target allocation among asset classes (e.g., equities, bonds, cash) is established based on the client ' s risk tolerance, time horizon, and financial objectives. This allocation remains relatively constant over time, with periodic rebalancing to maintain the original proportions.

Details of Andy ' s Recommendation : Andy recommends a fixed asset mix of 55% equities, 40% bonds, and 5% cash, which aligns with the principles of strategic asset allocation. The focus is on maintaining this allocation to meet long-term goals, without frequent shifts based on short-term market movements.

Why Other Options Are Incorrect :

A. Dynamic asset allocation : This involves frequent changes to asset allocation in response to market trends, which is not evident in Andy ' s recommendation.

B. Tactical asset allocation : This is a short-term, active approach where adjustments are made based on market conditions to capitalize on opportunities.

D. Ongoing asset allocation : While this involves periodic rebalancing, it is not a defined approach like strategic allocation.