Why do you think individuals continue to think they can "beat the market" with an active investment strategy when the evidence suggests that a passive strategy produces better results than the most experienced stock and bond traders?

Finance Nov 13, 2020

Expert Solution

If everyone follows a passive strategy, sooner or later prices will fail to reflect new information. At this point there are profit opportunities for active investors who uncover mispriced securities. As they buy and sell these assets, prices again will be driven to fair levels.

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