Guidelines for smart investing

Investing guidelines

Instructions: Click each investing guideline to learn more.


Divide your money among different types of investments to reduce your risk. Have a balance of different types of investments in a variety of companies and industries and you may want to consider diversifying your portfolio globally as well.

Buy and hold

Some investors overreact to news items they read or “hot stock tips.” They start trading all the time, buying and selling investments very quickly in an attempt to make quick gains. These strategies rarely work and can put you in serious danger of losing your money. Stay objective and focus on the long term. Be an investor, not a gambler. Avoid the impulse to react to sudden changes in the market or to buy the latest hot stock.

Keep track

Whether you invest online or through a professional, it’s important to keep track of your investments. A fast and convenient way is through online account access offered by many investment brokerage companies. This service allows you to view balance and transaction information, transfer money, contact customer service, and more. It’s usually provided for free.

Decide when to sell

One of the keys to successful investing is deciding when to sell investments that are doing poorly as well as those that have increased in value. To cut your potential losses and maximize your gains, consider setting strict guidelines for yourself regarding the specific price, either high or low, at which you will sell.

Revisit and adjust

Review your portfolio on a regular basis to see which investments have significantly increased or dropped in value. It also may make sense to reduce your exposure to investments that have appreciated and add to investments that have performed less well to keep your portfolio aligned with your investment plan.
Periodically rebalancing your portfolio can also help instill the useful discipline of buying low and selling high. This idea is simple, but can be challenging to do consistently.

Stick with your plan

Periodically review your investing plan so that you don’t lose sight of your goals. Adjust your portfolio as needed to maintain the mix of investments you want at your target level of risk.

Pay attention to costs

Taxes, fees, inflation, and other costs can all affect your return on an investment. It’s wise to consult with an investment professional and your tax advisor regarding the best way to minimize these costs.

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