The more time you have until your retirement, the more risk you can assume in your investments, and the greater the average annual return on your investments is likely to be. What this translates to, in a nutshell, is that for those who are decades away from retirement, the clear choice for your retirement dollars is the stock market -- the riskiest savings vehicle over the short term, but the most rewarding one over the long term.

In this lesson, we're specifically looking at long-term investing only, with long term defined as a period of at least five years. Any period shorter than that, particularly as it is applied to investing money that will be needed for retirement, is best thought of as short term, and we'll take a look at shorter-term investing (and asset allocation) in the next lesson.