Perhaps the most common advice given to individual investors with respect to asset allocation is to stick to a constant strategic

allocation in every period. Based on evidence from behavioral finance and historical characteristics of asset returns, why might this

be$,$ or not be$,$ good advice?

Select one

A$.$ Behavioral finance suggests it is good advice because behavioral biases tend to result in poor tactical allocation decisions.

B$.$ This is good advice since investment opportunities do not vary systematically and behavioral biases are largely mitigated by a constant allocation.

Investment opportunities are somewhat predictable because asset prices tend to exhibit short$-$term trending and longer$-$term reversion driven at least

C$.$ in part by behavioral biases among investors. Better advice for at least some investors would be to adopt a multi$-$period asset allocation strategy with

disciplined tactical adjustments to take advantage of changing investment opportunities.

D$.$

All statements are true except that this is good advice since investment opportunities do not vary systematically and behavioral biases are largely

mitigated by a constant allocation.