A constant-mix strategy outperforms in a flat but oscillating market but underperforms in a trending market. A constant-proportion strategy outperforms in a trending market but underperforms in a flat but oscillating market. Buy and hold limits downside by keeping funds in cash or bonds, while it performs well in an upward-trending market and is roughly flat in an oscillating market. If Nack doesn’t have any insight on where the market is going and wants to limit loss of principal, buy and hold is the best option of those offered, especially considering that her analysts are projecting either a flat or upward market, but not a downward market |
