Which of the following accurately reflect appropriate investment guidelines?
I.always invest in last year's best performing mutual fund
II.trade frequently to increase your investment returns
III.sell losing stocks unless you are willing to buy them at the current price
IV.take corrective action when so indicated
A) I and II only
B) III and IV only
C) I, III and IV only
D) I, II, III and IV

Question

Quizplus · Accepted Answer

I is incorrect because past performance is not necessarily indicative of future success. II is incorrect because frequent trading can actually lead to decreased returns due to transaction fees and the likelihood of making poor decisions based on emotions. III is correct because holding onto underperforming stocks may not be a wise decision unless you have a solid reason to believe they will recover. IV is correct because taking corrective action based on market conditions and your personal financial goals is essential for successful investing.

Which of the Following Accurately Reflect Appropriate Investment Guidelines