Choose wisely. There is only one correct answer to each question.
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1.
For saving for your long-term goals, advisors usually recommend starting out with stocks and holding them over the long term rather than switching eventually to safer investments.
False. Advisors usually recommend shifting to safer investments over time in order to protect the wealth you have built up.
2.
What activity forms the base of the investment pyramid?
Setting goals. The other activities will be greatly influenced by your goal setting.
3.
Once you're retired, you won't need to adjust your spending rate.
False. Market downturns and unexpected expenses can necessitate adjusting your spending rate.
4.
Why is setting your saving and spending rate more important in the investing pyramid than investment selection?
It helps you cope in the event of a shortfall in your investments.
5.
Which statement is false?
By quantifying each of your goals, you may find that it is not possible to achieve them all. But it's better to know that early on, so you can prioritize.
