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Strategy Beginner: Long-Term Investing

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1.
Long-term investors can invest in tax shelters to reduce taxes.
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True. The savings investors get from tax-deferral expand the growth of their long-term investments.
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.
The more an investments price changes, _______.
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The higher its volatility. Price changes and volatility are often found together in certain investments.
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.