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Stocks 101: Stocks versus Other Investments

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1.
If you buy a stock, it will definitely increase in value over time.
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False. Though stocks on the whole have increased in value substantially over the decades, we should not say that a given stock will definitely increase in value over time. Some stocks simply don't.
2.
When you buy a stock, you are _______.
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Buying an ownership interest in a company. When you buy a stock, you are buying an ownership interest in a company. Bonds are loans from companies and the government.
3.
Which of the following skills sets is NOT needed to be a successful investor?
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Advanced statistics. Understanding advanced statistics is not needed to be a successful stock investor. The vast majority of people have all the basic skills required.
4.
Over the long term, which investments provide the lowest real (inflation adjusted) returns?
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Savings accounts. Savings accounts provide the lowest real (or inflation adjusted) returns over the long term.
5.
Which of the following investments provide the biggest long-term returns?
Choose wisely. There is only one correct answer.
Stocks. Of the types of investments listed, stocks provide the biggest long-term returns. In attempting to reach your financial goals in life, maximizing the return on your investment dollars is key.