Communicate frequently and frankly with your advisor, particularly about your financial objectives and concerns. An honest, sincere relationship is fundamental to achieving your objectives.

Work with your advisor to develop a financial plan and asset allocation that will guide investment decisions. Review it at least annually with your advisor, inform him/her of any changes to your financial profile, economic circumstances or risk tolerance, and ask for the meeting notes for your records.

Review your trade confirmations and statements from all financial institutions for accuracy, and immediately contact your advisor with any questions or if there are any inaccuracies.

It is better to err on the side of conservatism than to be too aggressive. Keep expectations realistic. Don’t reach for irrationally high returns. Any investment that purports to provide significantly higher than market-rate returns may not perform up to expectations. Seek guidance from your advisor about investment opportunities that may seem too good to be true, such as promissory notes offering extremely high interest rates.

Be skeptical of “guarantees.” Advisors cannot share losses or gains in any client’s account.

Don’t try to “time the market.” Be a long-term investor, practice patience, and adhere to an asset allocation model. Moving to cash increases the risk that you may miss market rallies, which often take place in short bursts. Consider dollar-cost-averaging where prudent by continuing to add to equity investments on a regular basis.

Don’t panic and sell out of the market when investments have declined in value due to a general market decline. That can be the most opportune time to increase investment positions, as long as the fundamentals of the selections remain intact.

Be both receptive to and skeptical of new ideas. Evaluate them carefully and use them in moderation. Innovation in financial markets has generally led to higher levels of complexity. Sometimes simpler is better.

Always strive for diversity among investments, styles and portfolio managers, even when investments appear to offer limited risk. Your due consideration of the incremental costs of diversification is integral to this decision-making process.

As the name implies, income investments should be purchased both for the income that they provide as well as for long-term capital preservation. They should be high investment-grade unless you are willing to assume greater risk in exchange for the growth potential offered by other income-producing investments, such as high dividend-paying stocks, business development companies (BDCs), closed-end funds and other lending-oriented vehicles, many of which utilize leverage or take heightened credit risk.

Inflation requires a growing principal balance to maintain your standard of living. Establish cash distribution objectives that are lower than actual earnings or yields on your investments, and utilize a withdrawal plan that results in a growing principal account balance over the long run. Be mindful of investments, such as master limited partnerships (MLPs) and closed-end funds, which sometimes return capital as part of their distributions.

All, or a substantial majority of, equity investments should be in professionally managed portfolios or in a diversified group of high-quality securities. While emerging growth and small capitalization stocks, mutual funds or exchange traded funds (ETFs) often have a place in many wealthy investors’ portfolios, the vast majority of capital should be allocated to high-quality, recognizable securities with favorable prospects.

You should consider investing part of an equity investment portfolio in non-U.S. equities through professionally managed international mutual funds and asset management portfolios, understanding that there are additional risks associated with international investing.

High-net-worth clients should consider some real estate investments in their asset allocation models. These can take the form of publicly traded equities, such as real estate investment trusts (REITs), professionally managed private real estate funds or individual assets.

High-net-worth clients with sufficient liquidity should consider a small allocation to illiquid investments, such as private equity or venture capital. While these types of investments may offer the opportunity for enhanced returns, they carry increased risk.

Treat individual retirement accounts (IRAs) and other qualified plan investments as very serious money, and let the benefits of compounding work on your behalf over an extended time frame. Generally, do not fund qualified plans with partnerships or other complex investments as they can lead to reporting, valuation and tax complications. If electing to roll over assets into an IRA, carefully review the Rollover Election Certification and consider the costs and benefits before making a change.

Use margin sparingly for investment purposes, as leverage increases risk. However, if borrowing money for non-investment purposes, consider a securities-based loan (SBL) secured by account assets, which is often the lowest-cost borrowing alternative. Maintain the same discipline in paying down a margin or SBL balance that you would with any other loan.

While a prospectus or other investment literature can be intimidating, investing hard-earned dollars is a serious task and requires your attention and involvement. With the assistance of your advisor, read the literature and understand the investment’s fundamentals, risks, potential rewards and costs.

Generally, avoid granting discretion over your investments to anyone other than your advisor, professional money managers, or professional fiduciaries who work with reputable investment firms.

Everyone makes errors in investment selections. Learn to recognize a mistake and take losses early, rather than waiting to recover the original cost. It is generally far less painful to recognize a small loss than to ride an investment to zero.