1. Be cautious. Having a conservative bias makes mathematical sense. 2. Have realistic return expectations. Over the long haul fixed income investments like deposits and bonds will return between 4% and 7%, while property and shares have averaged returns of 7% to 10% a year.

After tax and inflation are deducted this return may translate into a real net return of 2% to 3% a year. Market volatility is an unavoidable part of investing.

3. Diversify. A wide spread of high quality investments across sectors, markets and assets is the most effective way of reducing risk. Diversify across time as well. Investing in instalments is a great way of protecting against mis-timing and buying just before a market fall.

4. Invest for income. Bond, property and shares all produce income. Capital growth is important, but it usually follows income growth. It gives you a roadmap on how to invest your portfolio.

1. Don’t ignore inflation. Inflation is every investor’s enemy number one. 2. Don’t rely on market forecasts. If you want no risk, this is the return you have to accept. 5. Don’t invest in anything you don’t understand.