Choose wisely. There is only one correct answer to each question.
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1.
Why are U.S. stock funds generally less volatile than individual U.S. stocks?
Because they own a collection of stocks. Because they own a basket of U.S. stocks, U.S. stock funds are less volatile than individual stocks.
2.
Why are micro-cap stocks and foreign securities usually best owned through a mutual fund?
Both of the above. Micro-cap and foreign stocks are often both more difficult to analyze and less liquid, meaning that it could be best to hold such securities through mutual funds.
3.
If you want to add mutual funds to your portfolio, where would be a good place to start?
Identify gaps in your portfolio. The first place to start is always to find what's lacking.
4.
If you work in the technology field, know a lot about tech stocks, and have a portfolio filled with them, what might you consider?
Investing in mutual funds that focus on non-tech sectors. No one sector remains in favor forever. Instead of learning how to invest in a different style, you might consider hiring an expert to do it for you and invest in a mutual fund covering that territory.
5.
What is the optimal mix of stocks and mutual funds?
The mix is up to you. There is no optimal mix. But think about using mutual funds to round out your stock portfolio.
