Tax consequences aside, missing even a few days per year when the market is rising can make a huge difference in your returns. Diversify your portfolio. After you have a basic stock fund or two, look at investing additional money in small company, international, balanced, value or income funds. Because not all segments of the world economy perform in lock-step, diversification helps ease the swings among market sectors. Watch for hidden costs.
Costs eat away at earnings and reduce total return.
Don't invest in anything you don't understand. Heating oil futures, foreign currency exchange rates and other exotic investments are designed to separate you from your money. As a rule, if you can't explain it to your children, don't invest in it. It contains solid information on no-load fund investing and includes a glossary of terms you should be familiar with. And watch out, there may be a quiz later.