What formula represents the target investment in stocks for a constant mix strategy?

In a constant mix investment strategy, the target investment in stocks is calculated by taking the target percentage allocation for equities and multiplying it by the current portfolio value. This approach helps investors maintain a predefined ratio of stocks and bonds despite market fluctuations.

By applying the formula of target percentage in stocks multiplied by the total portfolio value, investors can determine the specific dollar amount they should allocate to stocks in order to uphold their desired asset allocation. This consistent rebalancing ensures that the portfolio stays aligned with the investor's risk tolerance and investment objectives over time.

Other options may present different calculations or frameworks that do not align with the concept of a constant mix strategy. For instance, dividing the portfolio value by the target weight does not provide the intended investment amount in stocks, but rather an incorrect measure that does not reflect the desired allocation. Similarly, focusing on the bonds' target percentage or combining allocations of equity and fixed income does not derive the specific amount to invest in stocks under the constant mix method.