Investing $100 per month for 20 years in stocks

You are called a long-term investor if you have a 20-year investing horizon. Put your money in the stock market, either directly or through mutual funds that own equities; the value of your investment may vary, but over time, your average return will be higher than safer alternatives.

Your stock or investment fund may rise 11% one year, fall 6% the next, rise 9% the following, and so on, so it’s definitely a bumpier ride than safe and predictable choices like a savings account or a certificate of deposit (CD). However, after 20 years, you are almost certain to be in the black in terms of actual cash in your bank account.

Risk attracts a premium, whereas safety attracts a premium. You get to reap the premium while the long-term horizon removes much of the risk because you don’t have to worry about a stock market meltdown in a certain year.

TAKEAWAYS IMPORTANT
A long-term investor has a minimum time horizon of 20 years, which allows them to avoid playing it safe and instead take calculated risks that can pay off in the long run.
Long-term investors may consider dollar-cost averaging, which is investing a predetermined amount at regular intervals, generally monthly, regardless of market or economic performance.
Buying dividend-paying stocks and funds, as well as automatically reinvesting those dividends, is another…