How many times has someone let you in on a hot mutual-fund tip? How many times has it actually panned out?

Mutual funds are typically designed as long-term investments. When it comes to a long-term investment approach, hot tips and short-term thinking can hurt your portfolio's performance. There are no absolute rules on how to invest your portfolio successfully, but there are a number of tips that are generally accepted as sound ideas for long-term investors.

Get Started Early
This is the most important part of a solid investment strategy. Despite other financial pressures, starting early will often make the difference in achieving your long-term goal. Assuming that stock values appreciate in the long run, as they have historically, investing over longer periods can help you reduce the volatility that comes with the day-to-day ups and downs of the market. It can also help establish an overall pattern of appreciation.

Establish a Regular Investment Program
Even the experts find it impossible to invest only when prices are down and about to rise. A better strategy is to invest a set amount each month, regardless of market conditions. Like all investments, this approach can't protect you from a loss in declining markets, or guarantee a profit, but over time it can help to lower the average cost of your investment purchases. And it can help keep you focused on your longer-term goals in the face of market volatility.

Reinvest Distributions
Income and capital gains from mutual-fund investments can easily be reinvested to purchase additional fund shares. By reinvesting distributions you can increase your account balance over the long term. Assuming a positive return on your investment, you will realize greater benefits from compounding interest as well.

Maximize Tax-Advantaged Retirement Plans
If one of your investment objectives is retirement, be sure to invest in employer-sponsored retirement plans like 401(k)s, SEPs, and 403(b)s for which you are eligible. Many of these plans allow pre-tax contributions and tax-deferred account earnings. And remember that IRAs allow you to invest $3,000 a year, tax-deferred.

Don't Be Too Safe During Retirement
An old rule of financial planning called for preservation of capital once you retired. But with inflation eating away at your nest egg you should be more concerned with preserving your spending power. To keep ahead of inflation, be aware of how inflation and taxes affect your portfolio. Diversifying your portfolio and dedicating a certain portion of it for capital appreciation potential may be a way to stay ahead of inflation.

Prepare for the Long Haul
Once you have established a plan, avoid the temptation to overreact to short-term market fluctuations. Market volatility often leads to ill-advised investment decisions. Avoid chasing after hot investment tips that could seriously damage your long-term plan.

Schedule Regular Portfolio Checkups
As your lifestyle changes, you may need to gradually adjust your financial portfolio. Make it a point to meet with your Financial Advisor at least once a year to review your holdings. And make a more immediate appointment if you have a major life change-such as a new child, job change, or early retirement-between checkups.

Emily S Hazlett is Vice-President:Investments at ENB Insurance Agency, Inc. a wholly owned subsidiary of Evans National Bank.