Strategy Beginner: Introduction to Investment Strategy

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1.
Companies that do not pay dividends might be good growth investments.
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True. Often, companies do not pay dividends in order to funnel more profits into growth.
2.
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.
3.
If you might need to use your principal soon, which aspect(s) of trading would especially concern you?
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Maturity date and minimum investment. Minimum investment determines how much of your principal will be tied up, and the maturity date how long.
4.
A reasonably intelligent person who studies the tax code from time to time can probably make good decisions about how to shelter investment income from taxes.
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False. Even the simplest workplace retirement plan can have tax implications that require expert advice.
5.
Investors diversify to reduce the risks of different business trends.
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True. Diversifying helps them avoid any particular trend affecting their investments too much.