Caution: contents are hot. Not sure if you’re like me, but I love a little spice in my life, whether it’s chilli oil on my toast in the morning or with my investments.

And so should you. OK, maybe not the chilli oil part, but when it comes to your investments a little spice can be a good thing.

When I talk about “spice” I’m talking about the riskiness of your portfolio. I’m talking about those stocks that are up one minute and down the next. I’m talking about Netflix and how it fell 70 per cent in six months, then rose 100 per cent the following six months. I’m talking about high-risk assets like stocks.

Spice doesn’t always have to burn either. If something is high risk, it’s usually high returning too. This means your investments will grow much faster and you won’t have to do as much of the heavy lifting. But there is a caveat … you MUST hold these investments for many, many years. And not just two or three, we’re talking five, 10, even 20 years. The longer the better.

When you hold investments for a long time, you’re not selling out when they’re low, or high; you’re riding the wave regardless of what the stock market is doing. Investing in stocks is volatile: it’s guaranteed stocks will boom and bust, but over a long period of time the stock market goes up and to the right. i.e., over a longer period of time stocks are always worth more.

Take the above Netflix example. If you only held it for a short amount of time, you might have taken out your money after the first six months and lost 70 per cent, whereas if you held it for longer, you would have got a 100 per cent increase. But what if you don’t have a long time to invest? Or you’ve nearly reached your investing goal? You can still have some spice, but just a little.

If your investing goal is retirement, and you are 30 years away from that, you can afford to have 100 per cent, or most of your portfolio, in spicy (aka high-risk) investments. However, fast forward 25 years and you’re now only a few years away from retirement … it’s at this time you should be adjusting your spice level (maybe go from “hot” to “medium”).

This could be by investing more of your portfolio in low-risk investments like term deposits or bonds. Then, as you get super close to retirement, you might go for a “mild” portfolio so you can preserve the amazing money that you’ve made over the last 30 years; invest all of it in cash or bonds.

It’s best to think of your investing journey as a spice scale; when you’re young, you can have lots of spicy investments, but as you progress closer to needing the dollars, think about protecting what you’ve grown by investing in “cooler” things. That way, you won’t be burned by the market.

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