Put your money in “time capsules”
I think of my investments as being in time capsules. When I contribute to an IRA, I don’t expect to touch that money until I near retirement. It’s figuratively locked in a glass case I can’t open. (Plus, I’d likely owe taxes and fees if I were to use that money early.) I can adjust those investments, but I won’t be withdrawing any money for decades. Knowing I won’t be spending that money means I can invest it confidently in the stock market and take advantage of its volatility. A drop in value in the near term can be scary if you need the money. It’s less scary if you tell yourself it has decades to recover. And remember, in the stock market, a lot can happen in 5–10 years. During the 2008 global financial crisis, the stock market fell by 50% and then regained all of its losses within 5 years! The S&P 500 Index was near 1,500 at its peak in the fall of 2007. During the crisis, it bottomed out at around 675 in March of 2009. It returned to 1,500 by early 2013.