You have an investment portfolio comprised of multiple stocks and bonds. You make no attempt to time the market and sell securities only as you need to supplement your retirement income. You have a(n) _____ investment strategy.
A) Active
B) Passive
C) Pure liquid
D) Liquidity based
E) Tax-managed

Question

Quizplus · Accepted Answer

The investment strategy described is a passive strategy, where the investor is not actively buying and selling securities in an attempt to time the market, but rather holding a diversified portfolio for the long term and selling only when needed for retirement income. This is in contrast to an active strategy, which involves frequent buying and selling in an attempt to outperform the market. Pure liquid and liquidity-based strategies both focus on the ability to quickly convert investments to cash, while tax-managed strategies involve minimizing tax liabilities. None of these strategies are specifically described in the scenario.

You Have an Investment Portfolio Comprised of Multiple Stocks and Bonds