Resolve now to do so and mean it. Talking with a qualified financial planner or investment advisor will help you tailor your investment program to your individual needs. Diversify your investments among different industries, asset classes and geographical areas. Diversification simply means having investments that are not synchronized, so that some move up when others move down. Other examples include holding bonds and money market assets, as well as stocks, and investing a portion of your funds overseas.
Diversification achieves two goals.
It helps cut risk and actually increases the expected compound return of your portfolio. For these reasons, a certain amount of diversification is recommended even if you expect some what lower returns from the investments purchased for that purpose. Understand the power of dividends to contribute significantly to your total returns over the long run. Your total return from an investment is comprised of capital appreciation and dividend or interest income. Capital appreciation comes from changes in the price of the investment.