In a perfectly efficient market the best investment strategy is probably ________.

Question

Quizplus · Accepted Answer

In a perfectly efficient market, any attempt at active management or market timing would be fruitless as all publicly available information is already reflected in asset prices. Therefore, a passive strategy of investing in a well-diversified portfolio of low-cost index funds would likely be the best choice. Asset allocation is also important in this strategy to ensure appropriate diversification across different asset classes.

In a Perfectly Efficient Market the Best Investment Strategy Is