Test Your Investing IQ!

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Can you score above 50% on this quiz? If so, you know more than most people about investing!

1. What investment accounts have an income ceiling above which you are no longer allowed to contribute if you earn too much? (Select as many as apply.) *

1 point

Roth 401(k)

Traditional 401(k)

Roth IRA

Traditional IRA

HSA (Health Spending Account)

Required

2. Which of the following do not trade on exchanges? (Select as many as apply.) *

1 point

ETFs

Mutual Funds

REITs

Stocks

Bonds

Required

3. Which of the following is true about long-term capital gains? *

1 point

Long-term capital gains apply to assets held for at least 12 months

Long-term capital gains apply to non-qualified dividends

Long-term capital gains are taxed at the individual income tax rate

None of the above

4. What is the primary reason most individual investors should use dollar-cost averaging? *

1 point

To get the best prices on their investments

To beat the market averages

It removes the pitfall of trying to time the market

It saves money on trading and transaction costs

5. How is the tax treatment different for Roth vs. Traditional IRAs? (Select all that apply.) *

1 point

You put pre-tax dollars in your Roth and after-tax dollars in your Traditional IRA

You put pre-tax dollars in your Traditional and after-tax dollars in your Roth IRA

Income and earnings in the account are tax sheltered for the Roth but not the Traditional

After you reach the eligible age, you pay taxes on withdrawals for the Roth but not the Traditional IRA

After you reach the eligible age, you pay taxes on withdrawals for the Traditional but not the Roth IRA

Required

6. Which of the following is NOT a good reason to invest in stocks for the long-term? *

1 point

Stocks have historically performed better than cash and bonds over longer time horizons

Stock ownership allows you to ride the wave of human innovation and company growth

To help stay ahead of inflation

To maximize tax-loss harvesting

7. What's the main difference between ETFs and Mutual Funds? *

1 point

Mutual Funds are actively managed and ETFs are passively managed

ETFs are sold fractionally and Mutual Funds are sold by shares

Mutual Funds charge commissions and ETFs do not

ETFs have dynamic pricing throughout the day and are traded like stocks

8. Why is diversification across asset types a good idea? (Select all that apply.) *

1 point

You're guaranteed to beat the market averages over time

It's hard to predict which asset categories and sub-categories will do well at any given time

It reduces the need for rebalancing your portfolio

It reduces overall level of risk

Required

What to learn more about investing and how to build financial independence earlier?

Check out the Own Your Future: Personal Investing course, a 3-week online class. Self-paced videos + Zoom office hours and 1:1 coaching.
The course will be offered two more times this year, starting Oct. 26 and Nov. 30.
Learn more and enroll here: https://oyf.teachable.com/p/personalinvesting/

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