knowledge topics
Investment Styles
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Define types of investment management, such as:
- Active
- Passive
- Value
- Growth
- Compare passive and active investment management.
- Explain passive equity investment techniques, such as:
- Buy and hold
- Indexing
- Explain active equity investment techniques, such as:
- Value investing
- Growth investing
- Sector rotation
- Contrarian
- Momentum
- Diversification
- Compare value and growth investing, specifically:
- P/E ratios
- Dividend yields
- Relative expected return and volatility of investment
- Explain passive fixed income investment techniques, such as:
- Buy and hold
- Indexing
- Explain active fixed income investment techniques, such as:
- Duration matching
- Credit selection
- Explain laddering.
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
Read more about the Taxonomy used in the FP-BoK