The correct answer is      (E.)  10 Months

That's right; investors hold stocks for an average of just ten months these days. And even mutual funds, which are supposed to be held for a lengthy amount of time, are treated with similar impatience: in 1996, the average holding period was five-and-a-half years. By 2002, that fell to two-and-a-half years. But by getting out early, investors could be giving up +63% of their potential returns!

Here's the problem: investors tend to earn far less with short holding periods and high portfolio turnover. Research shows that riding out the market's volatility leads to greater returns than panic selling or chasing after the hottest trend, but most investors don't believe that. (If you've ever sold a stock on its way down, only to watch it rally once you tossed it, you know what we mean.)

But besides reducing the brokerage fees, longer-term investing lets investors enjoy the magic of compounding -- earning returns on reinvested dividends and capital gains. For example, I.G. Investment Management found that the average fund earned compounded annual returns of +11.5% over 17 years. Unfortunately, the average investor held the funds for less than three years and captured compounded returns of just +4.2% along the way. Put another way, the average investor missed out on +63% ((11.5 - 4.2%)/11.5%) of their potential returns by being patient.

Investing for the long term is obviously the best way to maximize returns. That's why certain types of funds are specifically designed only for long-term investing. These "asset-allocation" or "retirement" funds invest a range of securities. They all seek to maximize long-term returns for a given level of risk by carefully balancing their portfolios between stocks and bonds. This is usually achieved by setting a target date for the fund -- as the date gets closer, the fund's holdings will adjust to take on less risk. Investors can put their money in these funds based on what target date they desire and have it automatically adjust without the need to move money from fund to fund.

Most of them have shown remarkable resilience in volatile markets, and their diversification helps them outperform most stock-only funds when the market turns south. And because investors tend to hold asset-allocation funds at least a year or two longer than ordinary mutual funds, they help investors earn maximum returns. It's no surprise that the aging baby-boomer crowd has made asset-allocation funds one of the fastest-growing segments of the market.

Despite the fact that these funds are generally well-rounded, their investment profiles vary greatly -- even if they have similar target dates -- which makes choosing the right fund difficult. So Carla Pasternak, editor of StreetAuthority's High-Yield Investing newsletter, has waded through the crowd for you. Using StreetAuthority's proprietary screening techniques, Carla has uncovered nine of the highest-yielding "all-weather" funds -- including several that yield 8.0% or greater. To see Carla's exclusive list you must be a High-Yield Investing subscriber. To learn how to receive a risk-free subscription, please visit this link.