What's a Good Return on Investment?

The video tutorial explores various investment options, comparing their risks and returns. It starts with safe investments like savings accounts and CDs, then moves to public market investments such as bond funds, and finally discusses the stock market, focusing on the S&P 500. The tutorial emphasizes the importance of aligning investments with financial goals and diversifying to manage risk.

What is the main goal of investing, as described in the introduction?

• To make more money from existing money

• To keep money safe from inflation

• To avoid financial risks

• To save for short-term goals

Which investment option is described as safe and liquid but not ideal for long-term goals?

• Savings bonds

• High-yield savings accounts

• Certificates of deposit

• Savings accounts

What is a key disadvantage of certificates of deposit (CDs)?

• They offer no interest

• They have a high risk of loss

• They require a minimum deposit and fixed term

• They are not backed by banks

How do bond funds differ from savings bonds?

• Bond funds are affected by supply and demand

• Bond funds are not traded publicly

• Bond funds have guaranteed returns

• Bond funds are issued by the government

What is the average annual growth rate of the S&P 500 over the last 90 years?

• 7.8%

• 12.3%

• 5.5%

• 9.8%

Why might short-term investing in stocks be risky?

• Stocks are not available to average investors

• Stocks have guaranteed low returns

• Stock returns are highly volatile year-to-year

• Stocks always have negative returns

What is a recommended strategy to avoid losing your entire investment?

• Avoid investing in stocks

• Invest solely in the S&P 500

• Diversify your investments

• Invest only in savings accounts