INVESTING FOR THE LONG TERM
Although shares are a higher risk asset (their value could go down as well as up), investing in the stock market for the long term generally gives you a better return for your money, because any losses you suffer are recouped in time.
So if you’re investing on your child’s behalf, or for your distant retirement, time is on your side. Over 10 or 20 years, the value of the shares you hold should be expected to, at least, even out, if not increase. And an amount of compound interest can accrue on investments over such long period of time.
Since the value of shares can rise and fall quite quickly, you should invest for the long term. In practice, the stock market rises and falls in waves, said by some to be five-year waves, and this why many people advise you to invest for at least a five-year period.