When it comes to investing, high risk and high returns usually go hand in hand. Riskier, more volatile investments — those that tend to bounce up and down in value — will generally earn greater profits over the long haul than investments that slowly, but steadily, gain in value. If you’re saving well before you actually need the money, you can take advantage of this rule by investing in more volatile assets (typically stocks) and getting a higher return on your money. If you are in your forties, or even fifties, you probably won’t actually need the money for decades, so it won’t matter if your portfolio loses value this year, it’ll likely rebound in the next. That can lead to some pretty heart-palpitating moments as your investments see-saw up and down, but just grit your teeth and remind yourself that it doesn’t matter how much those stocks are worth today, what matters is how much they’ll be worth when you need them. The fact is, since the first American stock market opened in Philadelphia in 1817, the stock market has always gone up more than it has gone down.  Think about it.  There has never been a time when the stock market went down and just stayed there.  It has always recovered – always.  And here we are, in 2017, after the crash of 1929, after the crash of 1987, after the dot.com crash of 2000-2001, after the crash of 2008, and the stock market has posted a string of new record highs.  Yes, you can lose money in the stock market, but those losses are always only temporary.  After a time, the market recovers and your investment gains return. We tend to overlook these facts because of something psychologists call “loss aversion.” Consider again the age-old investing axiom, “The greater the risk, the greater the reward.” When we hear this we are likely to fixate on the risk… | Read More »