Rebalancers are likely to adopt "constant mix" strategy

CFA Level III
#1

tend to smooth the market. am I right?

#2

yea seems to make sense.

#3

I know that’s on one of my 500 pages of written notes somewhere around here.

#4

Yes that is correct.

#5

“500 pages of written notes” - you serious? Big Babbu You should be able to kill the AM session then…

#6

yes constant mix is a contrarian rebalancing strategy – sell when the market goes up, buy when the market goes down. if you understand the mechanics of it, there is no question they can ask that you wont get right – focus less on the memorization and more on what is actually happening.

#7

Name the other three type of investor in this context and the resulting effect on the market movement…

#8

holders – buy and hold, no effect on the market shifter – rebalance for nonmarket reasons. exacerbate market movements. valuators – value the market based on their beliefs. may be smooth or exacerbate depending on whether they are contrarian or trend valuators.

#9

^You will pass!!