| Exhibit 5: Active Investment Strategies
To actively approach the market, CPAs should
employ these strategies:
- Develop a
specific investment goal for your client or employer and
establish an investment policy that governs the management
of the portfolio.
- Review the prospectus of
any potential or existing investment to help determine
whether the funds investment policy matches your
understanding and expectations. If the prospectus does not
provide sufficient information, dig deeper. Request the
Supplemental Part B Prospectus (statement of additional
information) from the fund.
- Incorporate the
basics: research, value, buying low and selling high,
rather than being swept up in market hype about index
- Engage in an active rather than
passive approach to investing. Select managers with a
defined management discipline that liquidates overvalued
stocks in favor of rebalancing in undervalued issues.
Avoid the market creep of momentum investing presented by
- Blend the advantages of growth
and value styles. These styles tend to balance one another
during up- and down-market cycles.