Which method of investing probably involves the most risk?
A)Using the CAPM as a guide to select securities
B)Using a market-timing strategy to manage a portfolio
C)Using a buy-and-hold approach to manage a portfolio
D)Using DRIPS and dollar cost averaging to build a portfolio

Question

Quizplus · Accepted Answer

Using a market-timing strategy involves attempting to predict future market trends and buying and selling securities accordingly. This approach is highly speculative and involves a high degree of risk as it relies on accurate forecasting, which is often impossible. It is difficult to consistently time the market correctly, and investors could easily do more damage than good to their portfolio if they make the wrong prediction.

Which Method of Investing Probably Involves the Most Risk