Strategy Beginner: Long-Term Investing

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1.
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.
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.
A disadvantage of many long-term investments is that they are not liquid.
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True. There is a risk of loss for many long-term investments if they are liquidated.
4.
Bonds with short maturities are effective investments for long-term investors.
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False. Bonds with long maturities are effective investments for long-term investors.
5.
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.