Ever wondered how much you actually know about investing?
There’s a lot to know when it comes to investing, but you don’t have to know everything to get started. The basics — which you just might know better than you think — are enough to begin working toward your financial goals.
Still, knowing where you stand and what you might need to learn more about on your investing journey doesn’t hurt. Test your knowledge with this quiz built for beginning investors.
Which of the following statements about investing is false?
1. Investing and saving are the same thing.
2. Diversification helps reduce risk in a portfolio.
3. The S&P 500 is a stock index that tracks the performance of the largest publicly traded companies in the U.S.
4. Bonds are more risky than stocks.
5. A bear market is a period of long-term growth.
6. Timing the market is a good investment strategy.
7. An index fund aims to replicate the movements of a stock index.
8. A stock’s past performance guarantees its future results.
Bottom line
Well, how did you do?
If you got five or more right, you’re on the way to mastering the basics. If you got less than five right, you may have more to learn before getting deeper into investing.
Either way, knowing the basics of investing can help you gain confidence to build your wealth and achieve your financial goals.