Apply "Rule of 72." It tells you:

How many years it will take to double your investment at given rate of return. Examples: 72 / 9% = 8 years to double your money. 72 / 6 years = 12% needed to double your money.

How many years it takes to cut the purchasing power of a fixed income in half at a given rate of inflation. Example 72 / 5 % inflation = 14.4 years to cut your purchasing power in half.

Use technique of Dollar-Cost Averaging. This is investing the same amount of money in a security on a regular schedule (such as monthly) without regard for market conditions. Since the amount being invested is always the same, you buy more shares when the price is low, and fewer when the price is high. Dollar-Cost Averaging is frequently used with mutual funds and Dividend Reinvestment Programs (DRIPS).

Let time and market fluctuations work for you. Don't let emotions panic you into selling or make you greedy by chasing high returns. Web sites for more information are http://www.ici.org (The Investment Company Institute) and http://www.aaii.com (American Association of Individual Investors).

Know the basics for yourself. Watch, listen, read, surf, take some classes, but get started. Get advice and implementation from a financial counselor, planner, advisor, or broker.

The best predictor of future behavior is past performance but it is no guarantee of future results. The range of annual return for the asset classes between 1926 and 1997 was a low return to high return according to Ibbotson Associates:

Small company stocks - 58.0 to 142.9%

Large company stocks - 43.3 to 54.0

Long-term government bonds - 9.2 to 40.4

Intermediate-term gov. bonds - 5.1 to 29.1

Cash - 0.0 to 14.7

Investment Section I / Section II / Section III Advance to Financial Planning Return to Savings