Multiple choice

Which of the following is not true about the buy and hold strategy?

  1. It is preferred by many investors

  2. It does not involve rebalancing

  3. It is very beneficial as investors may exit from poor performers and invest in better ones

  4. All of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Buy and hold strategy involves purchasing securities and holding them long-term without active trading. The statement that investors exit poor performers contradicts the fundamental principle of buy and hold, which explicitly avoids active portfolio management or selling underperformers.

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