The correct answer is A. accumulation.
In the accumulation phase of the life cycle, investors are typically younger and have more time to recover from losses. They also have a higher earning potential, which means they can afford to take on more risk in order to achieve their financial goals.
In the consolidation phase, investors are typically older and have less time to recover from losses. They also have a lower earning potential, which means they cannot afford to take on as much risk.
In the spending phase, investors are typically retired and living off of their savings. They have no time to recover from losses, and they need their savings to last for the rest of their lives. Therefore, they should take on very little risk.
In the gifting phase, investors are typically older and have accumulated a significant amount of wealth. They may choose to give some of this wealth away to their children or grandchildren. This can be a risky move, as the recipient may not be as careful with the money as the investor was. However, it can also be a rewarding move, as it can help to ensure that the recipient is taken care of financially.
In conclusion, investors can normally afford to assume larger risks in the accumulation phase of the life cycle.