Let's begin with a common cliche: Don't put all your eggs in one basket.

A balanced portfolio is one that includes shares from a number of different companies and from different industrial sectors of the market. The more diverse the better. If one share, or one sector, performs badly, then you have balanced this with the gains you are hopefully making in your other companies and sectors.

Try to establish a spread of investments. As a general rule, you should aim to hold shares in at least six different companies in your portfolio at any one time. Remember, your first selection is likely to be your most favored company, and after you have chosen six, you are likely finding it harder to select a specific company to invest in from a range of alternatives.

Reinvest your dividends. If your investments pay Dividends, compounding the size of your investment by reinvesting the dividends will significantly increase the value of your portfolio.

You can limit risk by buying shares in 'blue chip' larger companies. Large, well established companies with a good reputation should maintain their value over the longer term, and if you are looking for long-term growth, this is the best place to start.

Try to limit your broker charges. These should be no more than 1.5% to 2% of the total value of your order. If they are significantly higher than this, then your investment has to grow by a significant amount to cover these costs and put you into profit! Remember, this is now a very competitive business area. Charges are under pressure and online Internet trading facilities have increased the pressure and further reduced your likely dealing costs.

For Long-Term Growth

If you are aiming for long-term growth, then providing your investment decision is based on solid company fundamentals, do not worry about short-term price fluctuations. Think in terms of what the company shares will be worth say 5 years from now.

If your reasons for originally selecting the company appear sound, and nothing has happened to adversely affect its value and performance over your 5 year time span, than it can be safe to assume that todays adverse fluctuation will soon swing back in your favor. (see further down for tips on aiming at short-term gains)