Strategy Beginner: Long-Term Investing

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1.
Real estate is generally an effective investment for the long term.
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True. Real estate usually, but not always, grows in value over long periods of time.
2.
Long-term investors can invest in tax shelters to reduce taxes.
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True. The savings investors get from tax-deferral expand the growth of their long-term investments.
3.
The ability to convert an investment into cash with little chance of loss is called ________.
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Liquidity. The more easily an investment can be converted to cash, the more liquid it is.
4.
The more an investments price changes, _______.
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The higher its volatility. Price changes and volatility are often found together in certain investments.
5.
Growth stocks come from companies whose earnings are expected to _______.
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Grow faster than the market average. The stock of companies with high earnings are valued highly in the marketplace, and thus grow greatly in value.