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Stocks 104: Stocks: What Matters and What Doesn't

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1.
Investors who trade frequently will, on the average, end up with higher tax burdens to pay, as opposed to not trading often.
Choose wisely. There is only one correct answer.
True. Generally, the more you trade, the more gains you make, and the more likely they will be of the short-term variety, which are taxed at higher rates than long-term gains.
2.
The stock market tends to _______.
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Be temperamental, over-reacting to near-term news. "Mr. Market" tends to be temperamental, over-reacting to near-term news. If the market were perfectly efficient and correctly valued future cash flows at all times, stock prices would not be so volatile.
3.
To be a successful stock investor, you need _______.
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Patience and the ability to think about future trends. Remember that successful stock investing is like chess, where thought, patience, and the ability to peer into the future are rewarded. Stock investing is not about trading.
4.
Investors have loads of tools at their disposal for analyzing the markets. Therefore, it is correct to say that _______.
Choose wisely. There is only one correct answer.
We still cannot consistently and accurately predict market movements. No one has yet predicted the market consistently and accurately; there are too many unknowns. Still, we continue to try.
5.
As a stock investor, what should you pay the most attention to?
Choose wisely. There is only one correct answer.
A company's competitive positioning. You should pay the most attention to a company's competitive positioning, which in turn will determine future profits.
DONE