A well-known stock market expert once said "There may be as many different investment goals as there are investors". In fact, that is one of the most difficult obstacles for inexperienced traders to overcome when they begin to invest.

Most experts say that a combination of investments will provide the best balance of risk and reward in a long-term portfolio. A diverse group of 'buy and hold' issues is a good foundation for any novice investor and a qualifying retirement account can help defer taxes. Those who need current income can choose from a vast number of dividend paying securities, many of which also have an excellent record of share price growth. Investors who choose to avoid certain types of business activity (based on ethical or financial principles) can still find numerous value-based stocks that meet their investment objectives. Those who wish to achieve the same performance as an industry or sector can purchase mutual funds and diamonds that mirror a specific group of stocks. More aggressive traders can apply value investing principles to blue chip issues; buying stocks that are undervalued and selling those that are overvalued. As a portfolio matures, investors can also diversify into bonds or treasury instruments to benefit from market and interest rates fluctuations.

While strategy is important, it is also imperative to approach investment activities with the right attitude and expectations. Trying to achieve too much from a portfolio can put the account in the red quickly (greed can lead to terrible decisions), and accepting returns that barely surpass current inflation rates will prevent a portfolio from growing. While most investors who make the effort to learn about the stock market are not satisfied to achieve the same return as the Dow or the S&P 500, others will actively seek mediocrity. Just look at the number of index funds that are sold to investors who then are relegated to losing what the market loses and gaining no more than what the market gains.

So how do you determine a reasonable expectation? Most investors who participate in historically profitable strategies will easily average 15%-20% return on an annual basis. In the long-term, 10% a year is the typical return for broad market stocks in general. In comparison to a rigid investing plan, the Dow's performance is just what it's described as; average, and yet Warren Buffett made his fortune (Berkshire Hathaway is worth over a billion dollars), by focusing on a mere 15% annual return on assets. His primary goal however, was to maintain a substantial margin of safety in all of the portfolio's holdings.

Charles Dow may have said it best, "The man who is prudent and careful in carrying on a store, factory or real estate business seems to think that totally different methods should be employed in dealing with stocks. Nothing could be further from the truth."