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Questions and Answers
What are the components of building a solid financial foundation?
What are the components of building a solid financial foundation?
- Investing, emergency funds, debt elimination, decreasing cash flow
- Investing, debt accumulation, protection, increasing cash flow
- Emergency funds, debt accumulation, protection, decreasing cash flow
- Emergency funds, debt elimination, protection, increasing cash flow (correct)
What can investing wisely lead to?
What can investing wisely lead to?
- Decreasing cash flow
- Protection from financial risks
- Financial freedom (correct)
- Debt accumulation
What is diversification important for?
What is diversification important for?
- Increasing cash flow
- Protection from financial risks
- Accumulating debt
- Reducing the risk of losing all money in investments (correct)
What is the recommended place to keep short-term investments?
What is the recommended place to keep short-term investments?
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What should long-term investments in the stock market be?
What should long-term investments in the stock market be?
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What is the term that is better than risk when it comes to investing?
What is the term that is better than risk when it comes to investing?
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What do DALBAR studies show about the average investor?
What do DALBAR studies show about the average investor?
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Study Notes
- Building a solid financial foundation involves investing, emergency funds, debt elimination, protection, and increasing cash flow.
- Investing wisely can lead to wealth and helping others.
- Sacrificing a little and investing can lead to financial freedom.
- Diversification is important to reduce the risk of losing all money in investments.
- Investing in all stocks in the market is better than investing in individual stocks.
- The roller coaster of the stock market can lead to emotional buying and selling, resulting in lower returns.
- Volatility is a better term than risk when it comes to investing.
- Keeping short-term investments in a high-interest savings account is recommended.
- Long-term investments in the stock market should be consistent, regardless of market fluctuations.
- DALBAR studies show that the average investor earns lower returns due to emotional decision-making.
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