Knowledge is power! This phrase is never truer than in the world of investments. As Benjamin Franklin stated, “An investment in knowledge always pays the best interest.” To help you better understand the basics that will produce desired results, here are 10 basic rules for all investors.

1. Know your goals and objectives and have a plan to achieve them. This rule should never be violated for any reason. Your plan is your roadmap to success. 
2. Diversify. Know the three basic investment categories (stocks, bonds, and cash or cash equivalents) and spread your wealth among them. You reduce your potential risk. As all experienced bankers would tell you: Spread out your risk by having a variety of loans or investments in your portfolio. 
3. Buy low and sell high. Of course you’ve heard this before in both serious and humorous discussions. While it sounds like an over-simplification, it is all true. Don’t rush out and buy a stock just because its price has risen. You might be able to find a similar investment at less cost that might cause a large price increase in your favor. 
4. Do your homework before making any investment. Investigate all potential investments until you feel comfortable with them. Only then should you put your money on the line. 
5. Avoid get rich quick investment schemes. Successful investing requires knowledge and patience. Most often, the only person who gets rich is the one who suggested this investment. 
6. Always listen to the investment advice of others with caution and care since no one can “guarantee” a positive return on an investment. While outright skepticism is not necessary, be sure to do your homework to evaluate potential investments. 
7. Let your profits continue but cut your losses quickly. While tempting, don’t be too hasty to take a sizeable profit if trends indicate the price may increase. At the same time, don’t bet the ranch that one of your favorites, now producing losses, will turn around, unless you have hard indications that it will. 
8. Know yourself and the amount of risk you’re willing to take. If your desire to make a great deal of money requires risks that make you uncomfortable, stop and get back in your comfort zone. Many who have violated this rule were very sorry they did. 
9. Have an investment philosophy that doesn’t only concentrate on short-term profits. Depending on your personal investment strategy, work with your financial advisor to structure your portfolio to have both short- and long-term investments. 
10. Never make investments and then forget about them. Monitor your portfolio regularly even if it is very modest. The market is ever changing. This is the only market certainty. Always know what investments you have, what they’re doing currently and what, you believe, their prospects are for the future.

Commit these rules, not just to memory, but to your investment philosophy. They will protect you from some losses and help you make more profitable decisions. After these are integrated into your investment psyche, you can expand your knowledge base for successful investing.

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