1. What is the core motivation for investing rather than holding cash?
Cash always grows faster Cash loses purchasing power to inflation over time, while invested assets have historically outpaced it Investing has zero risk It's required by law
2. What should generally happen before you start investing, according to the beginner's guide?
Max out an investing account immediately Build an emergency fund covering several months of expenses Buy the riskiest available asset first Take on maximum leverage
3. What is "dollar-cost averaging"?
Converting one currency to another regularly Investing a fixed amount at regular intervals regardless of price Timing the exact market bottom A type of margin call
4. In general, how are risk and potential reward related across asset classes?
Higher potential returns generally come with higher risk They are unrelated Lower risk always means higher returns Risk decreases as reward increases
5. What does the phrase "time in the market beats timing the market" refer to?
Day trading is superior to investing Staying invested consistently tends to outperform trying to predict short-term tops and bottoms You should only invest once Timing has no effect on returns