When might a Canadian equity portfolio manager employ a 'buy-and-hold' strategy?

Question: When might a Canadian equity portfolio manager employ a 'buy-and-hold' strategy?

Answer options:

• When attempting to profit from short-term market fluctuations. ✅ When they believe in the long-term growth prospects of specific companies and wish to minimize transaction costs.
• When aiming to generate income through frequent selling of covered calls.
• When actively seeking to outperform the market through tactical allocation.

Correct answer: When they believe in the long-term growth prospects of specific companies and wish to minimize transaction costs.

Explanation: A buy-and-hold strategy is a passive equity approach based on the belief in long-term capital appreciation, where an investor purchases securities and holds them for an extended period, irrespective of short-term market volatility.