Step 4: Own Many Stocks Instead of only a Few

What does the text suggest about the ease of making money in the stock market with individual stocks?

• It is easy for everyone

• It is hard, and risky

• It is guaranteed with effort

• It is impossible

According to the text, what percentage of public companies contributed to the 10% return?

• 2%

• 4%

• 6%

• 8%

What is the text's advice regarding stock investment?

• Invest in a few stocks

• Invest in many stocks

• Avoid stock investment

• Follow market trends

What is generally accepted as an annual withdrawal rate from your investments during retirement that’s likely to survive whatever happens in the markets?

• 3%

• 4%

• 5%

• 6%

What is the expected difference in portfolio return with increased stock diversification by owning hundreds or thousands of stocks instead of 50 or so?

• No difference

• Less from having too many stocks

• More from having more stocks

• No evidence exists either way

Starting with $1.6 million at age 65, what is the total portfolio value after 30 years, including retirement withdrawals at 4%, in the more diversified scenario with a 6.5% return?

• $4.8 million

• $5.8 million

• $6.8 million

• $7.8 million

Investing $5000 per year, how much extra money is gained by increasing the return rate by 0.5% in the more diversified scenario from age 21 to death?

• $0.8 million

• $1.0 million

• $1.2 million

• $1.4 million

What is the key message of the document regarding small changes in investment strategy?

• Small changes have no impact

• Small changes can lead to significant gains

• Small changes are risky

• Small changes are unnecessary

What benefit does owning index funds provide?

• High risk

• Professional management

• Limited diversification

• Complex record-keeping

What does the text suggest about owning many companies?

• It is more speculative

• It is less beneficial

• It is likely to yield better results

• It requires more study