Three Ways to Boost Your Investment Returns

But the more time you have until you need your money, they more time you have to recover from potential losses. History shows that the stock market moves inexorably upward: The S&P 500 has never lost ground over any 20-year period since at least 1926. So if you have decades before you'll need to draw on your savings, short-term downturns shouldn't disrupt your finances one whit -- meaning you can afford to ride them out in pursuit of greater long-term gains. As you approach the time when you'll need to withdraw your funds, you can shift the money you'll need into bonds and cash.

Diversify

Meanwhile, you can increase risk-adjusted returns by holding stocks of various sizes, industries and nationalities, and bonds with a variety of term lengths and credit qualities. Those different types of investments tend to move in different patterns --one might surge while another plunges -- helping you smooth out your portfolio's short-term fluctuations while pursuing long-term growth.

"If you want more return, you're going to have take more risk," Shapiro says. "But you can manage that risk with a fully diversified portfolio. In the long term, nothing is going to keep up with a fully diversified portfolio."