Question

For a novice or inexperienced investor, which would be the most appropriate choice for their retirement...

For a novice or inexperienced investor, which would be the most appropriate choice for their retirement savings?

Question 26 options:

a)

an S&P 500 Index fund

b)

an ETF

c)

a sector fund

d)

a portfolio of 5 blue-chip company's common stocks
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Answer #1

Novice or an inexperienced investor who wants to invest for their retirement savings must look for investment in an index fund because that is a kind of a passive investment strategy and he would be able to replicate the index rate of return for sure.

Exchange traded fund or the portfolio of 5 blue chip companies are actively managed so since he is an inexperienced investor ,he should not be investing into them.sector fund also carries high level of risks and inexperienced investor must avoid investing into these sectoral funds.

So the correct answer option a) S&P 500 index fund.

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