Whether you're new to investing or a seasoned investor there are 10 basic, but timeless, investment principles. Include these in your investment strategy and you'll be able to weather the storms of market volatility.

  • Know your retirement needs
    Retirement is expensive. Experts estimate that you'll need about 70 percent of your pre-retirement income — lower-income earners 90 percent or more — to maintain your standard of living when you stop working. Understand your financial future.

  • Find out about your pension fund
    If your employer offers a plan, check to see what your benefit is worth. Before you change jobs, find out what will happen to your pension. Learn what benefits you may have from previous employment. Find out if you will be entitled to benefits from your spouse's plan.

  • Contribute to a tax-sheltered savings plan
    If your employer offers a tax-sheltered savings plan such as a retirement annuity, contribute all you can. Over time, deferral of taxes and compounding of interest make a big difference in the amount of money you will accumulate.

  • Don't touch your savings
    Don't dip into your retirement savings. You'll lose principal and interest, and you may lose tax benefits. If you change jobs, roll over your savings directly into a preservation plan or your new employer's retirement plan.

  • Consider basic investment principles
    How you save can be as important as how much you save. Inflation and the type of investments you make play important roles in determining how much you'll have saved at retirement. Know how your pension or savings plan is invested. Financial security and knowledge go a long way.

  • Ask questions
    These tips should point you in the right direction, but you'll need more information. Talk to your employer, your bank, your human resouces manager or a financial advisor. Ask questions and make sure the answers make sense to you. Get practical advice and act now.

  • Don’t stop
    Invest regularly, regardless of the present outlook for the economy or stock market. Many astute individuals have become wealthy from buying up bargain stocks when nervous investors held back.

  • Reinvest earnings
    Reinvest all earnings, letting the power of compounding work for you. Taking out dividends from your portfolio just limits its growth.

  • Educate yourself
    Discover growing companies so that your wealth can grow as their sales and earnings grow over the years. Blue chips are the safe option, but ultra-safe can mean conservative returns. Educate yourself and learn how to analyse the financials of a company. Also read up on the entrepreneurs of the future in the financial press.

  • Diversify
    Diversify your holdings, and don't put all your eggs in one basket, regardless of how carefully you watch that basket.

    The important thing to remember is that investing is a process. You establish a process of buying products that suit your goals and allocate them according to your risk tolerance levels and a reasonable expectation of long-term rate of return. If you stick to the process and occasionally rebalance your portfolio as needed, you can pretty much ignore the media hype and the short-term flip-flops of the markets.


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