Choose wisely. There is only one correct answer to each question.
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1.
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.
2.
In any given year, which type of investment is more likely to lose 20% of its value?
A U.S. stock. A higher percentage of stocks have lost 20% or more of their value in a calendar year than mutual funds.
3.
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.
4.
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.
5.
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.
