Practice Quiz

Financial Planner

Category - Investment Planning

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Your client wants a hands-on approach to portfolio management since they have the tendency to anticipate the direction of economic conditions. What type of investment strategy does this client want to practice?
  1. Passive Investing
  2. Indexing
  3. Market Timing
  4. Buy and hold
Explanation
Answer: C - A client wanting a hands-on approach to portfolio management since they have the tendency to anticipate the direction of economic conditions is demonstrating a market timing investment strategy. Market timing is in direct conflict with the efficient market hypothesis. The more an investor believes that markets are inefficient, the greater the argument for a market timing strategy.
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