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.
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.
4.
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.
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.