Answer :
Income investments are not necessarily riskier than growth investments. The risk associated with an investment depends on various factors such as the type of investment, market conditions, and individual goals.
1. Income Investments: These types of investments focus on providing a steady stream of income to the investor. Examples include bonds, dividend-paying stocks, and real estate investment trusts (REITs). Income investments are generally considered to be more conservative and lower-risk compared to growth investments because they prioritize generating income over capital appreciation.
2. Growth Investments: On the other hand, growth investments aim to increase the value of the investment over time. This category includes stocks of companies with high growth potential, mutual funds focused on growth stocks, and certain types of ETFs. Growth investments tend to be riskier than income investments as they are subject to higher market volatility and potential for greater fluctuations in value.
In conclusion, the statement that "Income investments are riskier than growth investments" is false. It is important for investors to understand their risk tolerance, investment goals, and time horizon when considering different types of investments to build a diversified portfolio that aligns with their financial objectives.
1. Income Investments: These types of investments focus on providing a steady stream of income to the investor. Examples include bonds, dividend-paying stocks, and real estate investment trusts (REITs). Income investments are generally considered to be more conservative and lower-risk compared to growth investments because they prioritize generating income over capital appreciation.
2. Growth Investments: On the other hand, growth investments aim to increase the value of the investment over time. This category includes stocks of companies with high growth potential, mutual funds focused on growth stocks, and certain types of ETFs. Growth investments tend to be riskier than income investments as they are subject to higher market volatility and potential for greater fluctuations in value.
In conclusion, the statement that "Income investments are riskier than growth investments" is false. It is important for investors to understand their risk tolerance, investment goals, and time horizon when considering different types of investments to build a diversified portfolio that aligns with their financial objectives.
