Strategy Beginner: Long-Term Investing

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1.
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.
2.
You should take inflation into account when buying long-term investments because _______.
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Inflation erodes purchasing power over time. This is why you should consider the investment returns you can expect to get.
3.
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.
4.
Dividends are _______.
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Shared company profits. Dividends are investors cuts of company profits.
5.
Which of the following weathers market downturns best, on average?
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Long-term investments. The longer you invest, the more likely you will be able to weather market downturns.