Strategy Beginner: Introduction to Investment Strategy

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1.
In investment strategies, risk in traditional terms is _______.
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Good and bad. Risk in traditional terms can mean you fail to make money, or even lose it; but possible returns usually increase with the amount of risk.
2.
_______ are taxed at a relatively low rate if you hold your investments long enough.
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Capital gains. Long-term capital gains are taxed at a lower rate to encourage investment.
3.
Inflation affects _______.
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Both the value of investments and interest rates. Inflation affects both, which is why many investors watch it carefully.
4.
It is never smart to invest through a full-service broker.
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False. Investors who do not want to put in the time or effort to research and manage their investments may find a full-service broker essential.
5.
The more liquid an investment is, _______.
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The easier it is to turn into cash. Liquid investments are easy to turn into cash, either by withdrawing from them or selling them.