Strategy Beginner: Introduction to Investment Strategy

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1.
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.
2.
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.
3.
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.
4.
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.
5.
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.