Multiple choice

The strategy advisable for an investor to maximize investment return in the long run is

  1. buy and hold on to investments for a long time

  2. liquidate poorly performing investments from time to time

  3. liquidate good performing investments from time to time

  4. switch from poor performers to good performers
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The strategy of switching from poor performers to good performers helps maximize long-term returns by ensuring capital is deployed in better-performing investments. This involves regularly reviewing the portfolio, identifying underperforming assets, and redirecting that capital to investments with stronger performance potential, rather than passively holding all investments indefinitely.

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