1. Be Informed. If you are new to investing or if it is not an area of your primary interest, don’t plunge into it until you have a thorough understanding. And that includes knowing when to rely on someone else - who does have the expertise to help you.

2. Develop a Plan. Don’t know how? Develop your personal budget – current and future. Then, use our link to contact Social Security for an estimate of your benefits. Then start to build your retirement plan. As a great leader once said, “A failure to plan is a plan to fail.”

3. Be CHEAP! Everyone shops for the lowest mortgage rates, the best price on a new car, the least expensive airline tickets. But many people ignore the cost of investing. Don’t. It’s common sense - every dollar you don’t spend on investments (Commissions, mutual funds operating expenses, brokerage trading fees) is another dollar in your plan. If you’re 35 and you save costs of $100 per year – invest it! If you do and earn 10% on your investment, you will have over $18,000 when you retire at age 65. To modify what Ben Franklin said, “A penny saved could be a nickel earned.”

4. Employ Asset Allocation and Diversification. Or as the old adage says, “Don’t put all your eggs in one basket.” Remember, there is no “right” allocation for every investor. Over your investment lifetime you will use different asset mixes to match with your changing age, goals and risk tolerance. The important point here is to be consistent in your plan. Then, whether you invest through buying mutual funds, individual securities, or a combination of both, spread-out your risk within your asset allocation model. But there is a balance, too. You have to be sure you are diversified, but you don’t want to incur high costs just to own a lot of different investments. Diversification can be achieved inexpensively through careful selection of mutual funds, index securities, and individual company and government securities.

5. Be Patient. When you do invest- if you have been disciplined in your philosophy - be patient with your investments. Give them time to meet your expectations. Remember, the more you move around the more costs you incur and the more investment return you have to get to make up for the costs.

6. Be Disciplined. (Buy Smart/Sell Smart.) Develop some practical guidelines before you buy for how you will decide if an investment is a “good buy”, and how you will decide when an investment is a “good-bye”. This does not simply mean when you think the price may have reached a maximum, but more importantly when you think the price has gone low enough and you need to “cut your losses”. This goes hand-in-hand with #2, “Be Cheap!”

7. Don’t “Chase Performance”. OK, so you’ve been disciplined, but Fred at the office just told you his mutual fund earned 45% last month. Swallow hard, congratulate Fred and then don’t embarrass him and ask how much that fund was down last year. Everything runs in cycles. There will be variations in returns. Be smart enough to know that. But if you’ve done your homework, have been reasonable in your decisions, and can be patient, you will do well over the long run. Remember, this is an endurance race - not a sprint.

8. Stay Informed. Once you’ve established your plan or have begun to invest, you’re not finished. You need to stay informed now more than ever. That could be a national newspaper, a financial magazine or a website dedicated to providing information you find useful.

Next we’ll talk about types of Planning.