1. Increase your investment IQ. Take the time to understand your investment options and the pros and cons of each.

2. Define your risk comfort level. Typically, the more volatile an investment is, the more profit you can make - but also the more loss you may incur.

3. Safer investments generally promise a specific, but more limited, return and don't always keep pace with inflation. Deciding how much risk you are comfortable with will help you set and adhere to a smart investment course of action.

4. Match your investments to your goals. Define your short- and long-term investment goals and identify how much money you'll need to meet those goals. Then let those goals drive your strategy.

5. Don't be guided by investment gurus. Look for investments that can withstand the tests you require.

6. Do your own homework. Review available financials and projections carefully.

7. Diversify. Regardless of your personal risk profile, include a variety of assets that react differently to market conditions. Opt for a mix of investments, so that when one industry sector of the market declines, gains in your other holdings can cushion the blow

8. Put your investing program on automatic pilot. Treat investing as part of your basic monthly expenses.

9. Stick to your investment plan. Don't let market swings or the desire to make a sudden big purchase cause you to make impulsive decisions and alter your plan. Switching in and out of investments drives up transaction and tax costs.

10. Reinvest your profits whenever possible. You'll continue to build your portfolio and further balance out your risk.

11. Track your performance. Make it a practice to review your goals and investments once a year. In the event your circumstances change, you also might want to revise your strategy.

12. Check with your financial consultants. Periodically meet with your CPA and other advisers to review your portfolio and allocations in light of changing goals, tax laws, investment performance and various opportunities that might arise.

Source: National Society of CPAs

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