Investing Review

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A key difference between saving and investing is

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Saving is for money you need easy access to, investing is for long-term wealth

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Why is it important to start investing as soon as possible?

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You have more time for your money to compound and grow

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The possibility of losing all or part of your investment is known as

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risk

Front

A single share of ownership of a company is called a:

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Stock

Front

Stocks are low risk investments options.

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False

Front

Leaving your investments in the stock market alone for at least five years is a good way to reduce risk because…

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It keeps you from reacting to trends and dips in the market

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This is a type of investment where investors pool their money together to buy stocks, bonds, and other securities.

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Mutual Funds

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Which of the following is a way to start investing? Purchase stocks on your own, Pool money into a mutual fund managed by an advisor, Purchase part of an index fund, Hire a financial advisor to make a plan for you, All options are correct

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All options are correct

Front

Which of the following is TRUE about owning a share of stock? The value of a share is set by the company and never changes., You have to return the share of the company you own typically after 5 years, otherwise, you pay a penalty fee each year., Companies lose significant amounts of money every time someone buys a share., Owning a share means you own a percentage of the company.

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Owning a share means you own a percentage of the company.

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What is diversification in the context of investing?

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Spreading your investments across various assets to reduce risk.