Basics Beginner: Investment Goals

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1.
Financial advisors can help you consolidate your debts.
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True. Debt-reduction is an important first step in managing your finances.
2.
Investors have historically been punished for taking market risk.
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False. On the contrary, investors historically have been rewarded for taking market risk.
3.
A utility stock would be unsuitable for an investor seeking current income.
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False. Income stocks include preferred stock, utility stock, and large-cap, blue chip stocks. These stocks regularly pay income dividends.
4.
Investment advisors suggest increasing the number of fixed-income securities in your portfolio as you age because _______.
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Advanced age makes it difficult to regain losses from more volatile investments such as stocks. Having fixed-income securities in your portfolio can reduce this problem.
5.
If you wanted to accumulate assets for a down payment on a home in 10 years, which investment would be best suited for that?
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Growth mutual fund. This investment is liquid and provides better opportunity for appreciation than money market funds or CDs.
6.
The rate at which prices increase over time is called inflation.
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True. Inflation is the process of rising prices.