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“I won’t own stocks — I don’t want my savings to go down.” That seems to be the primary investing criteria for a number of people. But understanding and mastering this fear can be key to achieving financial independence.

There are a select few high earners who can afford not to own stocks. And there are others who are truly so risk-averse that owning stocks doesn’t make sense for them. But the vast majority of savers can comfortably own stocks, and seriously need stock market returns to have any hope of reaching their retirement goals.

Yes, I know it’s possible that we are in a new era where stocks could underperform for years. And neither I, nor any other observer, can guarantee that stocks will behave as they have historically.

But, if you want the surest bet over the long haul — the decades before and during retirement — the odds for your money are highest if at least a portion of it is parked in equities.

Regardless of the absolute numbers, in virtually every historical study, and in most future projections, stocks outperform other asset classes by at least several percentage points.

The issue with the stock market, whether or not you understand the mechanisms that make it a good long-term bet for your money, is that it feels scary sometimes. That’s the case even for seasoned veterans who have been managing an investment portfolio for decades.

But there are lots of things we do in life because we know that, logically or statistically, they are safe and beneficial — even though they don’t feel good at first. Everybody is different: some fear the water, some flying, some the dentist, some the unknown. But we’ve all developed common-sense techniques to deal with our fears and do what’s necessary. You can apply these same principles to the stock market and its cycles:

“Get Your Feet Wet”

Most of us don’t learn to swim in mile-deep ocean water. We learn to float in a wading pool, graduate to the shallow end of a full-size pool, and eventually develop confidence for the deep end. Only much later would we tackle long distances in open water.

It’s the same with the stock market. Begin by putting a small percentage of your savings into an inexpensive mutual fund or ETF. Learn how to buy stocks, and monitor their behavior in the market for a while, before exposing much of your wealth to the vast sea of investments and economic conditions.

“See the Big Picture”

Possibly the single most important concept for banishing fear in owning stocks is understanding that their dollar value at any point in time is much less important than the number of shares you hold. And that number doesn’t fluctuate!

Even paper money has no intrinsic value. Its worth changes over time. What really matters is what it represents, and what you can buy with it. In the same way, each share of stock you own represents a claim to a small percentage of the world’s productive output going forward.

That’s the underlying reality. Over the long haul, your stock market investments are highly likely to produce a growing stream of value that you can trade for the resources you need to live. Don’t sweat the details of how much cash you could trade your entire portfolio for on any single day: you’ll never need to do that.

“Don’t Look Down”

I mastered my fear of heights, and the stock market, and so can you. I’ve been a serious rock climber for more than 30 years, climbing rock walls as high as 3,000 feet. Yet, believe it or not, I still follow a simple rule to keep myself calm, especially when the climbing is difficult: Don’t look down!

The same principle applies in investing. If the stock market scares you, don’t look at it! At least, not very often. Once a quarter is plenty, and, if you are really prone to nerves, once a year should be adequate. Whatever you do, don’t watch or listen to the daily financial “news.” Routine coverage of stock market moves is entertainment at best, and a damaging distraction at worst. Turn it off and do something else for fun and excitement.

The same goes for valuing your investment portfolio, or computing your net worth. If it scares or disturbs you, then simply don’t do it very often. Once a year will suffice!

“Hedge Your Bets”

One of the best ways to keep your cool when the market is headed in the wrong direction is to own some investments that tend to head in a different direction, and focus on them. The mathematical measure for this relationship is “correlation.”

The traditional investment with a low correlation to stocks is bonds, and that is why most advisors recommend a portfolio that is a mixture of stocks and bonds. Other asset classes that are not highly correlated to the U.S. stock market include international stocks, and real estate. By mentally separating your assets in times of stress, perhaps even thinking of them as multiple portfolios, you can leverage your courage.

But what about times like 2008/2009 when it seems like everything is headed down? Cash serves well in that scenario, which is why you want an emergency fund. But it would be nice to own something that actually goes up. The classic, simple, uncorrelated asset is gold, or precious metals in some form. William Bernstein writes in The Four Pillars of Investing that “precious metals stock returns are almost perfectly uncorrelated with most of the world’s other financial markets.” Which is why I recommend that everybody think about holding at least a small portion of their assets in some kind of contrarian position. It can be a great comfort to hold something that the rest of the world values, when it is in a panic.

“Take One Step at a Time”

A final thing to remember, when the economic world inevitably goes crazy, is that your time frame is far longer than the stock market’s. Most of us will work from 20 to 40 years. And, according to recent U.S. CDC statistics, life expectancy at age 65 is about 17 to 20 years. Many will live far longer than that. Careers and retirements last for decades.

By contrast, the length of the average bear market over the last century has been about 18 months. And the average time for the broad market to recover and reach its previous highs is about 5 years. Since the length of the average retirement is about four times the length of the average market recovery, it is foolish to lose sleep because stocks are down for a few years. As long you own other asset classes that you can sell at a profit or derive income from to live on, odds are that the rest of your portfolio will recover and shine in time to provide for you as well.

Conventional advice is not to put money at risk in the stock market that you might need soon, and to keep a cash “bucket” with a few years of living expenses in retirement. I would expand that thinking. I think it’s less important to keep a large stockpile of unproductive cash, subject to inflation risk, than it is to maintain a variety of uncorrelated buckets which you can draw from. If you begin retirement with enough savings, and orchestrate your investments so you are always living off income, or holdings you can sell at a profit, then it is highly unlikely you will run out of money. Worrying about current stock prices makes little sense.

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To be successful in life, and investing, it’s important to accept reality. And the reality is that most Americans must take on some risk in the stock market in order to get the returns they need to reach their retirement goals. What if your risk tolerance doesn’t currently match your financial goals? You have two choices: adjust your financial goals, which may or may not be feasible. Or, educate and acclimatize yourself to the stock market, so you can avoid hitting the panic button.…