The Simple Secret to Doubling Your Stock Returns Over Time

The Simple Secret to Doubling Your Stock Returns Over Time

Long-term stock investing might sound boring to some, but if you really want to grow your wealth, it’s the smartest move you can make. It’s not about chasing trends or reacting to the daily news. According to legendary investor Charles D. Ellis, the real magic ingredient is time.

Yep, just plain old time.

Tune Out the Noise, Tune Into Time

There’s no denying that the world feels unstable — conflicts overseas, economic uncertainty, political drama, and endless media buzz about what’s going wrong. But if you’re investing for the long haul, those headlines don’t matter nearly as much as you think.

What really counts? The steady power of compound returns from stock index funds — especially when you reinvest those dividends and let them grow over decades.

Charles Ellis, a long-time believer in index fund investing and the author of Rethinking Investing: A Very Short Guide to Very Long-Term Investing, puts it like this:

“The secret to investing, in my view, is time.”

Who Has a 60-Year Investing Horizon?

Actually, a lot of us do. If you start investing in your 20s and keep going into your 80s — and even plan for your kids or grandkids after that — you’ve got decades ahead. Ellis himself, at age 87, is still investing with his grandchildren in mind.

He’s had the advantage of being financially stable, educated, and healthy, but his main point applies to everyone: think long term, even across generations.

Stocks vs. Bonds: Finding the Right Balance

Now, let’s be real — not everyone can afford to lock money away for decades. Life happens. Bills have to be paid, emergencies pop up, and financial cushions are necessary.

So yes, before you go all-in on long-term stock investing, make sure you’ve got your short-term needs covered. Keep some savings in cash, high-interest savings accounts, or short-term securities like Treasury bills and money market funds. Bonds, especially investment-grade ones, can also help protect your money if you’ll need it in the next five to ten years.

That said, Ellis believes that the money you’re investing strictly for long-term goals — like retirement — should be 100% in stocks. Why? Because over long periods, diversified stock index funds have consistently delivered strong results.

Do You Really Need Bonds?

Here’s where opinions split. The author of this piece keeps some money in bonds as a safety net. As a career journalist without a huge financial buffer, he’s never been comfortable risking it all in stocks — especially with the short-term market dips that can hit hard.

And Ellis gets that. If you’re new to investing or already near retirement, it’s probably too risky to suddenly shift your entire portfolio to stocks. But if you’ve got time — and you’re investing for your future or the next generation — low-cost index funds are still the safest way to grow wealth over time.

The Proof Is in the History

Let’s look at some actual numbers. Howard Silverblatt, a top index analyst at S&P Dow Jones Indices, reports that from 1926 to early 2025, the S&P 500 returned an average of 10.43% annually — and that includes some nasty downturns.

Over a recent 60-year stretch, the return with reinvested dividends was about 10.46% per year. That’s incredible.

To break it down: If you had invested $1,000 in a diversified stock index fund 60 years ago, you’d be sitting on nearly $390,000 today. That’s compound growth at its finest.

Even though index funds didn’t exist until the late 1970s (thank you, Jack Bogle), they’re now easily accessible — and more popular than ever.

Why It Still Takes Guts

Let’s not sugarcoat it — investing in stocks isn’t always smooth sailing. The market dips. Sometimes badly. Morningstar data shows that over the past century, stock portfolios lost money in 30% of one-year periods. Even a mix of 60% bonds didn’t eliminate risk, losing money 18% of the time in short spans.

To stay sane and financially secure, holding some cash and bonds isn’t a bad idea. They give you flexibility and peace of mind — especially if you need your money soon.

But if you’ve got time on your side? That’s where the magic happens.

Final Thoughts: Play the Long Game

Charles Ellis makes it clear: if you want to see your money double again and again, you’ve got to stick with it — through thick and thin.

Yes, the future is uncertain. Global shifts are happening, economies are evolving, and the markets will always have ups and downs. But long-term stock investing, especially through diversified index funds, remains one of the most reliable ways to build wealth.

Ellis said it best:

“Stick with the stock market for decades — because that’s where the sweet, sweet, sweet stuff comes through.”

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