Money Talk Quiz, May 2022

The latest Money Talk Quiz includes multiple-choice questions on topics such as the inverted yield curve, the uneven performance of stock indexes and the fundamentals of long-term investing. Test your knowledge (or how much you’ve retained from our podcasts). Each answer includes links to further information. […]

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Dollar Question

Each week in the Money Talk Podcast, Landaas & Company advisors offer insights for long-term investors by discussing the ever-changing circumstances of the financial markets. To test if you’re paying attention, try to provide the context for a sample of what advisors have talked about recently.

1.

In the April 1 Money Talk Podcast, Chris Evers and Kyle Tetting talked about a relatively rare occurrence, in which longer-term bond yields dipped below what shorter-term bonds were paying. The phenomenon is known as an inverted yield curve. What did Chris and Kyle say it signifies?

(Choose one.)

  1. That it’s time to lengthen the duration of bond holdings
  2. That a significant economic expansion is imminent
  3. That investors expect current economic growth to outpace future prospects
  4. That it’s time to shift portfolio balances more toward stocks

(See correct answer below.)

2.

Broad returns for both bond and stock funds tracked lower in the first quarter of 2022. Art Rothschild encouraged investors to keep a longer-term perspective, pointing out in the April 8 Money Talk Podcast that over longer periods, investment portfolios balanced between bonds and stocks have been making money. Art also reminded listeners of the purpose of balance, which he said is:

(Choose one.)

  1. To make a lot of money as fast as possible so you can coast through retirement
  2. To make money over long periods without losing much during intermittent downfalls
  3. To maximize returns while minimizing expenses
  4. To rely only on long-term returns and completely ignore short-term losses

(See correct answer below.)

3.

Dave Sandstrom noted that as of the April 15 Money Talk Podcast, the Nasdaq composite stock index had declined from its 2021 close substantially more than the Dow Jones Industrial Average. What point was Dave making in that comparison?

(Choose one.)

  1. Growth stocks tend to fare worse in rising rate environments. (The Nasdaq is laden with tech companies.)
  2. Investors should be careful which indexes their passively managed funds are tied to.
  3. Recent fiscal investments in infrastructure appear to be supporting industrial-based stocks.
  4. Companies in the Nasdaq index generally have stronger ties to China, whose economy has been hampered with renewed efforts to combat COVID-19.

(See correct answer below.)

 4.

In the April 22 Money Talk Podcast, Brian Kilb and Steve Giles were part of a discussion of how recent retreats in stock prices could represent a reawakening of investors to long-term fundamentals. What did they identify as those fundamentals?

(Choose one.)

  1. Time in the market, not timing the market
  2. Wall Street climbs a wall of worries.
  3. Don’t fight the Fed.
  4. Interest rates and earnings

(See correct answer below.)

Answers

1.

c. That investors expect current economic growth to outpace future prospects

Learn more:
How interest rates are shaping up, a Money Talk Video with Kyle Tetting
Leaning into the curve, by Joel Dresang
How bonds fared as Fed has raised rates, a Money Talk Video with Kyle Tetting

2.

b. To make money over long periods without losing much during intermittent downfalls

Learn more:
Get the total picture of your investments, a Money Talk Video with Paige Radke
Why investments outperform their investors, a Money Talk Video with Kyle Tetting
The Importance of Balance for Investors, a Money Talk Video

3.

a. Growth stocks tend to fare worse in rising rate environments. (The Nasdaq is laden with tech companies.)

Learn more:
Value & Growth: Going Deeper, a Money Talk Video with Brian Kilb and Marc Amateis
Talking Money: Growth vs. Value, by Paige Radke
The case for active funds amid volatility, a Money Talk Video with Kyle Tetting

4.

d. Interest rates and earnings

Learn more:
Uncertainties distract from fundamentals, by Kyle Tetting
Focus on fundamentals to face volatility, a Money Talk Video with Steve Giles
Technically, follow fundamentals, by Bob Landaas
Fundamentals trump fear, greed, a Money Talk Video with Brian Kilb

PREVIOUS MONEY TALK QUIZZES
Money Talk Quiz, April 2022
Money Talk Quiz, March 2022
Money Talk Quiz, February 2022
Money Talk Quiz, January 2022
Money Talk Quiz, November 2021
Money Talk Quiz, September 2021
Money Talk Quiz, August 2021
Money Talk Quiz, July 2021
Money Talk Quiz, June 2021
Money Talk Quiz, May 2021
Money Talk Quiz, April 2021
(initially posted April 29, 2022)

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