Question

Suppose that someone has decided to follow a buy-and-hold strategy in technology stock purchases and buys...

Suppose that someone has decided to follow a buy-and-hold strategy in technology stock purchases and buys these stocks 8 years before retirement. The stocks grow in value and this person's retirement wealth increases. Critically evaluate this investment decision. Was it smart? Could it have been improved?

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Answer #1

It can be mentioned that this isn't is smart decision even if the value of the stock increased and this is because of the fact that the person is closing retirement and this means technically he is risk appetite should be less and because he bought only technology stocks, he is confining to 1 sector where the the risk level is very high and he could lose all the money which is not a good option just nearing retirement. that is the reason why it is not a smart decision and it could have been improved by diversifying the stocks in which he has invested so that the risk level is reduced keeping the returns a bit high

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