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Strategy Beginner: Long-Term Investing

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1.
Which of the following weathers market downturns best, on average?
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Long-term investments. The longer you invest, the more likely you will be able to weather market downturns.
2.
Real estate is generally an effective investment for the long term.
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True. Real estate usually, but not always, grows in value over long periods of time.
3.
Growth stocks come from companies whose earnings are expected to _______.
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Grow faster than the market average. The stock of companies with high earnings are valued highly in the marketplace, and thus grow greatly in value.
4.
The ability to convert an investment into cash with little chance of loss is called ________.
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Liquidity. The more easily an investment can be converted to cash, the more liquid it is.
5.
Tax-deferred investment accounts usually come with early withdrawal penalties.
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True. Early withdrawal penalties are meant to keep money in investments for long periods.