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1.
If you find yourself following the crowd in your investment choices, you are doing what kind of practice?
Behavioral finance. Behavioral finance covers a number of psychological practices that tend to be at odds with the mathematical approach of various investing theories.
2.
What investment theory suggests that investors cannot beat the market, so they should index it?
Efficient market theory.
3.
What is the gist of the bucketing approach to retirement allocation?
You segment your portfolio based on when you expect to need your money. Segmentation is done in order to fund several years of retirement.
4.
In a nutshell, the efficient market theory says _______.
You can't beat the market. The theory says that stock prices are as correct as they possibly can be, and therefore you cannot beat the market. It has its detractors, however.
5.
Favoring smaller companies over larger ones is an example of ______.
