Investing isn’t easy. Watching your money grow and then deplete can feel like you’re riding on a lifelong emotional rollercoaster. What’s even harder is figuring out where to invest your money, knowing when to sell, and figuring out the best time to buy. There’s a lot that goes into successful investing.

But investing doesn’t have to be a guessing game. While it’s never an exact science, there are certain rules that you’ll want to follow that will help you to meet your investing and financial goals.

Here are seven rules for smart investors.

  1. Invest Early

The earlier you start to invest, the more money you have available to grow. Compound interest is an investor’s best friend!

Some of the best advice that any investor will give you is to start investing as early as possible. Even if you can only put $100 a paycheck into a retirement account, it’s better than putting nothing away at all. 

The longer your money is in the stock market, the more time it has to grow. By investing as soon as your income allows it, you can make tens of thousands of extra dollars. It pays to not wait!

  1. Have Investing Goals

Investing your money is a great first step, but investing without a goal is like hopping in the car without a destination. Before you put thousands of dollars into the stock market, have a few end goals in mind.

For instance, maybe you want to save as much money as possible for retirement. To achieve this in the investment world, you’ll want to look at what retirement program your employer offers while also considering individual options. If your employer offers a 401(k) program with matching, your best bet is to maximize your investments here so that you can maximize the matching (AKA free money!)

If your employer doesn’t offer a robust retirement program, consider opening an IRA. With an IRA you’re able to lower your taxable income, which is great come tax season, while also saving to meet your retirement goals.

  1. Work with a Financial Advisor

Many people are against paying someone else to lose their money. But if you hire a qualified financial advisor that has your best interests in mind, you’re much more likely to come out on top. Hiring a financial advisor is beneficial if you’re new to investing and don’t yet know the ins and outs of managing your money on your own.

Before choosing a financial advisor, you want to know the credentials and experience. It’s also helpful to see testimonials from past and current clients. Online you can compare the 5 best financial advisors in Tampa on the Careful Cents site.

  1. Diversify Your Portfolio

Just as the old saying goes, “don’t put all of your eggs into one basket.” When investing, you don’t want to put all of your funds into a single asset. The more diverse your portfolio is, the better. It’s ideal to spread your money across the various types of assets, including stocks, bonds, and mutual funds.

You’ll also want to spread your money geographically, as you don’t want to be too heavily dependent on investing in a certain region of the world.

By diversifying your portfolio, if one of your assets performs badly, there’s still the chance that your other investments will make up for the losses. While nothing is guaranteed in the investing world, spreading your risk just makes sense.

  1. Know Before You Invest

Avoid the hype of investing in a “hot” stock that every other investor seems to be buying into. A smart investor only invests in assets that they’ve thoroughly researched. Before you put your money into something, you want to know exactly what the risks are and what’s involved.

You can find important information about funds by looking at the Key Information Document or the Key Investor Information Document. You’ll always want to read this before you invest in anything.

  1. Review Your Portfolio Periodically

While you don’t want to mess around with your investments too much, you also don’t want to invest in something and then forget about it. Over time, investments change in value, which means that your asset allocation may not be ideal for meeting your investment goals.

Be sure to rebalance your portfolio to ensure that you’re still in line with meeting your objectives.

  1. Don’t Plan to Get Rich Quick

There are very few things in life that will make you rich quickly, and investing isn’t one of them. Never go into investing thinking that you’re going to get rich overnight. A smart investor invests for the long-term. In order to get the biggest benefit, you want to remain invested for at least five years. But the longer you’re invested, the better chance you have of getting even higher returns.

This means that you need to be comfortable to accept the risk that you may gain money, or you may lose it. By investing, you’re not promised to get more than what you put in.

If you’re only looking to invest for a few years, consider other financial options such as a certificate of deposit or a high-yield savings account.


Knowing how to make smart investing decisions will serve you well now and long into the future. Keep these seven rules in mind to ensure that you’re making an investment that will allow you to enjoy growth and gains.