You’re involved in "speculative investing" when you put money into high-risk propositions in hopes of receiving a large payback. Speculative investing rarely creates long-term value, and you generally should avoid it. Remember, "a fool and their money are soon parted."

Learning the principles of "value investing" is fairly easy, and it can provide fair to excellent returns on your money. For the vast majority of us, this is the way to go. "Slow and steady wins the race."

Here are some tips:

• Pay yourself first. Set aside at least 10 percent of your monthly income for savings and investments.
• Be patient with your investments. Don’t yank out your money whenever an investment loses a bit of money. Value investments will have short-term ups and downs, but they usually pay off nicely in the long term.
• Consider the effects of taxes. Your goal is not to maximize your investment returns. Your objective should be to get the best after-tax returns for a reasonable amount of risk.
• If your investments keep you awake at nights, then there is too much risk in your portfolio. Sell your riskiest investments and use the money to buy safer propositions. You also can reduce risk by diversifying your portfolio across a variety of investments.
• If you don’t understand an investment, then don’t put any money into it. There are lots of good investment opportunities that are easy to understand. Why risk putting money into something that might or might not make sense? Alternatively, spend more time learning about financial markets.
• If something sounds too good to be true, it probably is. There is no such thing as a free lunch, but there are plenty of con artists who are willing to take your money.

If you want to study the principles of value investing, purchase one of the many books written about financier Warren Buffet and his company Berkshire Hathaway.

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