True or False: Common stocks always provide higher returns than bonds and money market investments.

Common stocks do not always provide higher returns than bonds and money market investments, which is why the answer is considered false. While historically, over the long term, stocks have generated higher returns on average compared to bonds and money market instruments, this does not hold true in every circumstance or time frame.

For example, during periods of market downturns or economic recessions, stocks can experience significant declines, whereas bonds, particularly high-quality government bonds, may remain stable or increase in value due to their safer nature. Additionally, money market investments tend to have lower risk and provide stable but lower returns, which can sometimes outperform stocks in short-term scenarios or specific economic conditions.

Moreover, the risk profile of these investments varies: common stocks are generally considered more volatile, which means they can potentially offer higher returns over long periods but also come with greater risk of loss. Consequently, it's crucial to understand that the performance of these asset classes can vary widely based on market conditions and investment horizons.