Strategy Beginner: Introduction to Investment Strategy

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1.
If you might need to borrow against your principal, you need _______.
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A collateral investment. A collateral investment can be used to secure a loan.
2.
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.
3.
_______ 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.
4.
The charge for investing in an annuity or mutual fund is called the ________.
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Load. The load is the charge for buying or selling shares in a mutual fund or annuity.
5.
The greater potential return that investments offer in return for accepting greater risk is called ________.
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Risk premium. This is the "reward" for taking on risk.