Question

Referring to the investment pyramid above explain what investments would be a wise starting point for the new investor

Answer 1

Answer: The Bottom Level

Explanation:

Whilst I see no invest pyramid, I can infer for your question because Investment Pyramids are usually of the same structure.

They start with low risk instruments at the bottom. Then as one goes higher up the pyramid they encounter riskier investments. For instance, Equity stocks occupy the middle of the pyramid whilst Speculative stock such as stock from a small new company occupy the top.

As a new investor, it would be recommendable to start at the bottom of the Pyramid because those instruments are of lower risk and require less intensive control.

Instruments such as Government bonds as well as Treasury Bills, Money Market mutual funds, and Short-term Certificates of deposit.

This will ensure that the investor learns the basics, gets experience and suffers little risk.