Chartered Institute of Stockbrokers (CISI) Professional Practice Exam

Active investment strategies are characterized by frequent buying and selling of assets with the aim of outperforming the market or achieving specific investment goals. This approach relies on taking advantage of short-term market fluctuations and price movements. Investors who engage in active trading often analyze market trends, economic factors, and various securities to make timely investment decisions.

Regular buying and selling for profit reflects a hands-on approach, where investors actively manage their portfolios, making adjustments as needed based on market conditions or economic data. This strategy can involve a variety of asset classes and is distinct from passive investing, which focuses on long-term holding without frequent trades.

In contrast to the correct choice, low frequency trading is more aligned with passive investment strategies, which aim to minimize trading costs and maintain investments for the long term. Focusing only on high-growth stocks limits the investment scope, as active strategies often include a broader range of assets. Additionally, holding assets for the long term is contrary to the essence of active investing, which thrives on frequent interaction with the market.