Basics of Investments

The video explains investing as a way to grow money over time, likening it to planting seeds. It highlights the importance of investing to achieve financial goals, create wealth, and provide a safety net during emergencies. Key factors in investment decisions include safety, risk and return, liquidity, and diversification. The video distinguishes between short-term and long-term investments, providing examples and potential returns. It concludes with advice on making informed investment decisions and emphasizes the power of investing wisely.

What is the primary goal of investing according to the introduction?

• To save money in a piggy bank

• To grow money over time

• To spend money on luxuries

• To avoid financial planning

Which factor is crucial in making investment decisions?

• Ignoring risks

• Focusing only on high returns

• Balancing risk and return

• Investing in a single asset

What does owning an equity share mean?

• Having a fixed deposit in a bank

• Owning a small piece of a company

• Investing in government securities

• Buying real estate

What is the ability to convert assets into cash quickly called?

• Liquidity

• Return on investment

• Diversification

• Equity

How does diversification help in investment?

• By investing only in stocks

• By diluting risk across various sectors

• By focusing on one sector

• By increasing the risk

What is a characteristic of short-term investments?

• They are less flexible

• They offer high returns with high risk

• They aim to preserve capital and provide liquidity

• They are designed for more than a year

What is a potential benefit of long-term investments?

• They are risk-free

• They offer potential for higher returns

• They require no planning

• They are highly liquid