Diversify Do not put all your money in one type of investment. Investing in individual stocks may provide a greater return, but it may also expose you to greater risk. If investing in mutual funds you can reduce the risk of investing in a single stock. A mutual fund is composed of several stocks. Investing in similar mutual funds from different investment firms may not be as diversified as you think, because the top 10 - 15 holdings in each fund may be the same companies.
Diversification helps reduce and mange risk.
If your investments focus on retirement and you are several years away from retirement age, swings in the stock market and economic conditions can be tolerated. As you get older and closer to withdrawing some of your investments, review your accounts periodically and change your allocations accordingly. Don t wait until you are ready to use these funds. Periodic Deposits Make scheduled periodic deposits to your investment accounts. By doing this you dollar cost average your investment.