Strategy Beginner: Long-Term Investing

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1.
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.
2.
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.
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.
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.