Stocks are long distance runners 

A stock investment represents shares of ownership in a corporation. Stock owners share in the good and bad fortunes of a company as reflected in its stock price and dividends. If a company grows and prospers, share value generally rises. 

Over long periods, the stock market has produced higher returns than corporate bonds, government bonds or Treasury bills. 

Stocks also have the best record of producing returns that outpace the inflation rate. 

The stock market will vary substantially from day to day, and it may go for months on end in the same trading range, but over time, it has maintained its steady upward trend. If you’re working to achieve a long-term goal—five or more years away—a stock fund should be part of your portfolio.

Stay on track

Many investors are grappling with focusing on retirement goals when their day-to-day expenses are taking a bigger bite out of each paycheck. It can be hard to save when gas is more than $4 a gallon and everything from food prices to utility bills are on the rise. But “now” is always a good time to invest. People rarely get rich on a paycheck alone. Real wealth is built over time, and history has shown repeatedly that investing in the stock market is one of the best ways to achieve financial freedom.

Even small amounts invested regularly can make a big difference over the long-term, which is why I am a fan of automatic investment programs—they enable you to put your savings and investing on autopilot. Here is how it works. Once a month, you can have $50 (or more) deducted from your bank account or paycheck and deposited into your Ariel Investments account. Because it’s automatic, our shareholders have found they are less likely to give up when times get tough.

Need more convincing? Investing just $50 a month consistently over 25 years grows to $47,868 (assuming an average annual return of 8%). As your financial situation improves, you can increase your contribution and the story gets even better. Take a look at the chart below. By investing $100 a month, you could have $95,737 over the same 25 year timeframe! This is the power of compounding and something you cannot afford to miss.

 
Note: A program of regular investing does not assure a profit or protect against depreciation in a declining market. The examples show the benefits of an automatic investment program and assume regular monthly investments over 25 years at an 8% annual return. Examples are illustrative only and are not indicative of any specific return you may receive from a particular investment.