Intelligent investors, especially those just starting out, follow some or all of these balanced principles:

1. They invest based on well-defined goals.
2. They basically understand how everything they own works, before they buy it.
3. They know how their adviser gets paid at every level. They also know how much they pay per year in account and asset fees.
4. They know their own risk-tolerance, and when the market goes down they stick to their predetermined plan.
5. They don’t put all of their eggs in one basket. This can be accomplished early on with mutual funds.
6. They understand how their investments are either taxed (dividends and capital gains) or sheltered (in IRA’s, 401k’s, etc…) each year.
7. They use the right tool for the right job. (Insurance to replace income, not to build wealth)
8. They communicate regularly with their team. (spouse, partner, CPA, attorney, financial adviser)
9. They understand the limits of their knowledge and act accordingly. (choosing to work with an adviser versus investing on their own via online brokerage accounts)
10. They do not make long-term decisions based on short-term events. (watching the news, natural disasters, elections, etc…)
11. They understand that the number one indicator of success in the end is not what investments they choose, who they work with, or how they behaved in market crashes – it’s that they actually saved money in one way or another.