Final answer:
The statement is true; mutual funds and exchange-traded funds are designed to cater to a diverse range of investment preferences, including those of both aggressive and conservative investors. They provide varied investment options from focused sectors to broad market exposure, offering liquidity, professional management, and the ability to create a balanced portfolio consistent with personal investment goals.
Step-by-step explanation:
The statement that mutual funds and exchange-traded funds (ETFs) are available to meet the goals of both aggressive and conservative investors is indeed true. Mutual funds are professionally managed investment programs funded by shareholders that can be easily converted into cash. This liquidity, paired with professional management, allows investors to partake in the market without the need for an in-depth understanding of individual investments. Whether an investor seeks to invest in specific sectors like biotechnology or diverse geographical areas such as Indonesia, or intends to have a broad exposure to the market with an index fund, mutual funds offer a variety of choices.
Similarly, exchange-traded funds (ETFs) are investment funds that are traded on stock exchanges, much like stocks. They provide a diversified portfolio in a single transaction and are known for their lower costs and tax efficiency, making them attractive to both aggressive and conservative investors. ETFs can also be focused on specific sectors, countries, or broad market indices, providing the flexibility to tailor investment strategies to individual goals and risk tolerances.
The beauty of both mutual funds and ETFs lies in their accessibility and the diversity they offer, enabling investors to create a balanced portfolio that aligns with their investment objectives, whether that involves high-risk, high-return strategies or a more cautious, preservation-focused approach.