Which investment strategy best reflects the principles of time value of money?

Investing in stocks with expected growth best reflects the principles of time value of money because it recognizes that money can grow over time due to compounding returns. The time value of money is the financial concept that a sum of money has a different value today than it will in the future; in general, a dollar today is worth more than a dollar in the future because it can be invested and earn returns.

When you invest in stocks, you are typically aiming for capital appreciation and potential dividends, which can increase your wealth over time. This approach takes advantage of market growth and the compounding effect, where the returns on an investment generate further returns as time goes on.

In contrast, holding cash in a savings account may earn interest, but this typically does not grow the investment significantly compared to the potential high returns of the stock market. Not having an investment strategy at all means missing the opportunity for growth, while waiting for potential returns before starting investing delays any gains and misses the compounding effect entirely. Therefore, choosing to invest in stocks with expected growth directly aligns with maximizing the time value of money concept.