No one can control or predict the performance of the stock market, let alone a single equity. That’s why it’s important to diversify your portfolio across major asset classes to help you pursue optimal returns for the risk level that you’re willing to take. You may want to consider diversifying within each asset class to take advantage of different styles and market sectors so strong performance in one area may be able to minimize downturns in another.

The goal is what professionals call “non-correlation.” That just means all of your investments are unlikely to move the same way at the same time. On any given day, some may be up and others may be down in value. In a well-diversified portfolio, you can realize the profit on the gains without losing too much on the losses. It all goes back to the age-old adage — don’t put all your eggs in one basket.

Whenever possible you should consider setting up an automatic investment plan.

For example, if you invest in an employer- sponsored 401(k), you can set up automatic investments for each pay period. The percentage of your total pay (up to the maximum permitted) is taken out of your paycheck before any taxes and invested in the asset allocation strategy you choose. Your employer might even match a portion of your contribution. Not only do your savings accumulate, but the taxes on any investment gains you may realize are deferred until you retire and begin taking distributions.2 Other types of investment accounts, such as brokerage accounts, also may offer automatic investment plans and may provide additional flexibility in investment choices and access to your money, otherwise known as liquidity. However, unless they are in an individual retirement account, they may not provide any tax advantages.