Question

Your client Jessica needs 75000 for a down payment for an apartment. She has it in savings and wants to invest it but wants to be able to access it when needed. Which investment should Jessica avoid

Answer 1

Jessica should avoid investing her down payment money in stocks or bonds due to their high risk and potential lack of accessibility. A savings account would be a safer option, offering stability and liquidity.

Step-by-step explanation:

Jessica should avoid investing her down payment money in stocks or bonds, as these investments come with a certain level of risk and may not be easily accessible when needed.

Stocks are considered high-risk investments because their value can fluctuate greatly over time. While they have the potential for high returns, they can also experience significant losses. Bonds are generally considered lower risk than stocks, but they still carry some level of risk, especially if the issuer defaults.

A savings account, on the other hand, would be a safer option for Jessica's down payment. It is a low-risk investment that offers easy accessibility to funds whenever needed. Although the return on a savings account may be lower compared to stocks or bonds, it provides stability and liquidity, both of which are important for short-term financial goals like a down payment.