Kelly and Pete just had a baby. They received money as baby gifts and want to put it away for the baby's education. Which of the following tends to have the highest growth over periods of time as long as 18 years?
Click on the arrows to vote for the correct answer
A. B. C. D.D
Of the given options, stocks tend to have the highest growth over periods of time as long as 18 years.
A U.S. government savings bond is a low-risk investment that offers a fixed rate of return. While they are backed by the U.S. government, they typically have a lower return compared to other investments, such as stocks.
A savings account and a checking account are both deposit accounts that offer low returns and do not generate much growth over time. The interest rate on these accounts is usually lower than the rate of inflation, which means the value of the money deposited in these accounts decreases over time.
In contrast, stocks represent ownership in a company and can provide significant growth over long periods of time. Stocks have historically outperformed other investments, including bonds, savings accounts, and checking accounts. However, they do come with higher risks than the other options and their returns can be volatile in the short term.
It is important to note that the choice of investment depends on the risk tolerance of the investors, their financial goals, and their time horizon. It is recommended that investors consult with a financial advisor to determine the most appropriate investment strategy for their particular situation.