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10 Tips for Successful Investors
by Ginita
Wall, CPA, CFP®, CDS
and Candace Bahr, CEA, CDS
 There are volumes written about how to become a
successful investor, and the advice is often quite complex.
Here are some common-sense tips that will improve your investment
success, no matter what your level of financial sophistication.
1. Come early to the party, and stay
late.
Begin investing as soon as you can, be patient, and let time shower
your investments with compound growth.
2. Keep adding to your investment stash.
Each month, invest as much as you can afford, and increase your monthly investments
whenever you can.
3. Spread your investments around.
Invest the money you'll need soon in very liquid investments, but when investing for
the long-term, invest as much in stocks and equity mutual funds as you can.
4. Cut the IRS off at the pass.
Invest as much as you can in tax-deferred retirement plans, such as
401(k) plans. Your money will grow faster and you can afford to invest more now because
you won't have to pay taxes on the money until you retire.
5. Don't let the bears get you down.
Abraham Lincoln once said "When you have got an elephant by the
hind legs and he is trying to run away, it is best to let him run." The same thing is
true of bears - don't panic and sell low. Let the bear market run its course, which
history tells us is likely to be short.
6. Keep your balance.
Once you have decided how much to invest in each type of asset, rebalance often to your
original percentages, particularly after a large market shift, upward or downward.
7. Don't expect miracles.
Your investment decisions won't be right all the time, and some of your funds will
underperform your expectations. But as you rebalance and weed out consistent
underperformers over the years, you will generally achieve a reasonable overall investment
return.
8. Buy-and-hold, don't cut-and-run.
Don't change mutual funds every year to acquire last
year's hot performer. It may be a flash in the pan, and to buy it you may dump a good
long-term investment, tossing it from the frying pan into the fire and missing the sizzle
altogether.
9. Think before you leap.
Don't buy an investment without analyzing it
carefully. Options, futures, and start-upven-tures are all gambles. You may want to take
an occasional fling on such investments, but do so with money you can afford to lose.
10. Ask the experts.
Seek professional help if you need it. As the loads
(commissions) on mutual funds shrink, professional advice is no longer expensive. Even if
you are a do-it-yourselfer, consider a periodic checkup with a financial adviser to hone
your portfolio's performance.
At WIFE we welcome your comments and
questions.
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