This is the most crucial element of investing in stocks…

From the desk of Miles Everson:

Hello!

I’m thrilled to talk about another investing insight for today’s  “The Independent Investor.”

Every Wednesday, I talk about investing insights and strategies in the hopes of helping you achieve financial freedom through this activity.

Today, let’s talk about time and why it is crucial when investing in stocks.

ANNOUNCEMENT

You’re probably aware that President Donald Trump has now signed more executive orders in his first 10 days than any recent president has in their first 100 days.

He’s making waves in immigration policy, international trade, and public health, while most investors are frozen wondering what might happen next.

That’s why my friend and colleague, Professor Joel Litman—who’s consulted with both the Pentagon and the FBI—is stepping forward to lay out what he thinks is about to happen and exactly which types of stocks to buy and sell immediately.

In fact, he’s been waiting for a moment like this for 30 years!

In his brand-new market update, Professor Litman predicts President Trump’s actions will potentially trigger triple-figure gains in a shortlist of little-known U.S. stocks, beginning as soon as March 3.

Click  here  for full details (includes a FREE recommendation).

This is the most crucial element of investing in stocks…

Since AI took center stage, stocks have soared to all-time highs.

Take the S&P 500 for example.

The index has risen to more than 60% since 2022 and more than 25% in 2024.

Considering that the average annualized return of the index is 9.8%, that’s quite incredible.

What’s more is that this rise occurred despite the presence of sky-high interest rates, growing default risks, and a tightly contested presidential election.

Market rallies are a good thing. However, when rallies are sustained for a long time, investors start to get uneasy and they wonder if this continuous rise is setting them up for a massive downturn in the near future.

Since 2024, gold has seen its value rise, indicating that some folks don’t trust the wave of market rallies we’ve been seeing.

That said, should you be considered?

As we’ll explain today, the market’s ups and downs shouldn’t worry you so much  IF  you’re managing your money right.

Time

The stock market is great for generating wealth… as long as you keep your sense of  time.

By that, we mean you should only invest money that you can afford to leave untouched for at least a decade.

Why?

It’s because the markets are volatile, and you might not earn the money you invested back in less than 10 years.

Savvy investors know this and that is why they allocate their money into four buckets, according to  Rob Spivey , the Director of Research at  Valens Research  and  Altimetry Financial Research.

As seen in the table above, any money you need within the couple of years should be kept in cash as there’s no investment that can reliably earn your money back over such a short time frame.

Next, money you’ll need in two to five years should be put in bonds as they are better protecting value over a five-year period.

For a broader timeline—five years to a decade—money should be allocated between stocks and bonds based on macroeconomic outlook.

Stocks are favorable when you’re bullish while bonds can be turned to when you see warning signs in the market.

On the chance that you won’t to go all in on stocks, make sure you won’t need the money you’ll invest in that asset class for the next 10 years.

Simply said, stocks are the best asset class for wealth generation as long as you stay invested for at least 10 years.

In fact, this can be seen from the chart from the book,  “Stocks for the Long Run”  by Jeremy Siegel.

The chart shows more than 200 years of performance data for the top asset classes.

As you can see, stocks crush the competition over the long term even over the likes of the U.S. dollar and gold, which is considered as the market’s favorite safe haven.

The Best Asset Class in the Long Run

The continuous rise of stocks have made investors nervous. However, it should be remembered that bull markets don’t end simply because they’ve lasted for a long time.

This is why as an investor, you shouldn’t worry when the market is going strong for a long period of time.

As long as you’re following the right allocation strategy, you’ll be able to ride highs and lows of the stock market without worry.

Hope you’ve found this week’s insights interesting and helpful.

Stay tuned for next Wednesday’s The Independent Investor!

Do you agree that the world runs on America’s currency—the U.S. dollar?

Learn more about  why the U.S. dollar is still “king”  in next week’s article!