Watch five minutes of financial news on television, and you may think investing is hopelessly complex—a frenetic blur of numbers, symbols, and hyperactive floor traders shouting and making strange hand signals.

The reality is very different. You can build a successful, long-term investment program with just a few simple components, bearing in mind that ‘simple’ isn't the same as ‘easy.’ And as important as your financial decisions are – so is the resolve to stick with your program.

1) Make a Realistic Plan

Review your finances honestly and carefully. Know your goals and determine what you need to do to achieve them. Then create an investment strategy that’s aligned with your long-range and short-range financial goals. Remember to be realistic. Don't expect your portfolio to earn a return of 25% each year. Instead, think about being ultra-conservative instead with your projected returns and go from there.

2) Pay Yourself First

The great thing about automatic investment and direct deposit plans is that you won't miss the money you direct into your investment accounts, because you won't have had a chance to spend it in the first place. You can easily arrange automatic deposits from your bank account or paycheck into your retirement and non-retirement accounts. Gradually increase your investment amounts as your income grows, and you may be pleasantly surprised at how your assets accumulate, without making a big dent in your wallet.

3) Diversify, Diversify, Diversify

A portfolio that has the appropriate mix of stocks, bonds, and cash investments for your needs is easier to create than you think. One of my favorite sources to recommend for designing an investment portfolio is the recommendations you’ll find in the great book, Work Less, Live More, written by Bob Clyatt.

4) Have an Emergency Fund

Many people, even though they invest for long-term goals such as retirement, don't think about how they would handle financial needs in an emergency. Generally, I recommend you maintain a spending cushion sufficient to cover at least three to six months of expenses in the event of a hardship, such as illness, job loss, or a death in the family.

5) Watch Costs

The lower a mutual funds cost, the greater the percentage of the funds returns that investors receive. Low costs are especially important in bond and money market funds.

6) Don't Be Emotion-Driven

It's all too easy to get caught up in the short-term volatility of the stock and bond markets and to chase performance, reacting emotionally when making decisions about your investments. However, keeping a level head and resisting the urge to change your portfolio are traits of successful investors. Stay the course and resist the urge to make sudden changes.

7) Monitor Your Plan Annually

At least once a year, review the performance of your investments and measure annual performance to the financial goals you set. Analyze any variances, positive or negative and course correct when needed.

Note: All investing is subject to risk including loss of principal. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance, and especially short-term past performance, is not a guarantee of future results.

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