You work hard to earn your money. Not only do you want to keep it but ideally you would like to grow it. You would be surprised how poorly people manage their investments. And no wonder, there is a ton of confusing information out there. It's not that you are stupid, it's just that there is so much being thrown at you and you don't know whom to trust. More importantly, a lot of the information is geared toward giving the big guy the advantage.

Named one of the country's top 100 capital market strategists by BusinessWeek 3 years in a row, Mark Elenowitz knows a lot about what happens in the market. He currently runs BANQ, the online division of TriPoint Global Equities and has a 25-year track record of institutional banking and financial strategy.

I interviewed Elenowitz, who has been championing the everyday investor and helping entrepreneurs looking to raise capital for more than 20 years. Regardless of whether you are leveraging your savings to build a company or just socking it away for that life sipping Mai Tais on the beach, you can benefit from his advice. Elenowitz believes good investments can easily be managed with a few simple rules.

1. Be an accountable investor.

There is a romanticism to trading stocks and beating the market, but most people truly don't have the time to do the hard research required to become a Wall Street guru. But just because you rely on experts doesn't mean you should step out completely. Elenowitz says: "Investment is much more than just capital, but also time and effort." Put in what's required to make smart decisions. After all, the only money you lose on a bad investment is your own.

2. Don't believe everything you read and hear

Elenowitz explains, "Individual investors are always falling victim to rumors on the chat boards, water coolers, the internet and spam emails." He points out that if it sounds too good to be true, then typically it is. Look for legitimate information and be cautious when the opportunity sounds too optimistic.

3. Only invest what you can afford to lose.

Elenowitz advises, "If you are investing on your own, treat yourself like a client and be honest with yourself in analyzing your goals, then invest according." Even the best investments are subject to uncontrollable circumstances, so don't bet it all on the supposed sure thing. "All investors need to self examine their investment objectives, priorities, time horizons and suitability," says Elenowitz.

4. Diversify for safety.

The old saying notes that you shouldn't "put all your eggs in one basket." This certainly applies to the market more than anywhere else. Market changes can hit various sectors at different times in different ways. Allocate your capital across multiple sectors and industries to help level the returns. Elenowitz suggests, "Diversification should include equities, bonds, certificate of deposits, municipals and other investments. Mutual funds are also a great way to diversify."

5. Save your money for the market, not the brokers.

In the old days expensive brokers in paneled offices were the only access to the market. In the modern age you can now use discount brokers and have a plethora of services at your disposal to do your own trading. Like Elenowitz' company BANQ, discount trading services will let you trade lots of stock for only a few dollars or even 99 cents. They even have creative ways of letting you be part of expensive investments. Elenowitz explains, "BANQ also offers fractional share purchases, meaning you no longer have to buy 1 full share of GOOGL when now you can buy a fraction of that."

6. Don't be buying when the big boys are selling

Be cautious of buying valuations when they reach the public markets. Often institutional investors, who have the luxury of access to early stage deals and valuations, have hyped those prices. Many of these positions are also being actively sold in the secondary market to other institutions each time at a stepped up valuation. Elenowitz shares one good example of how you can get hurt by this activity. "Some of Facebook's early backers increased their planned sales at the IPO and many other institutions jumped in too. Individual investors all thought they would get rich off Facebook and put in buy orders. The stock went down and individual investors were left with losses." Protect yourself by reading the prospectus for selling shareholders and financial information. Then research who has been selling in advance of the IPO.

7. Don't get caught up pushed valuations.

People are always looking for an easy clue to a good investment but Elenowitz points out that not all trends are well founded. One or two market leaders who provide great returns breed copycat companies that play off that success without the underlying knowledge. Elenowitz explains the danger. "Investors flock to these investments not realizing that many of these investments may seem similar but are trading at multiples without merit and that the bubble may be bursting." Investors fear that they may be missing out and don't invest wisely. Don't get caught at the top.

8. Be wary of fads.

One fad that is getting a lot of press is equity crowd funding which is not yet legal and Elenowitz advises that when it is, "Most investment structures for Crowd Funded companies will be unsophisticated and not beneficial to the investor." Investors should be concerned about investing in companies with little chance of return of capital or liquidity and most likely will need significant additional capital that could lead to further dilution.

9. Start your business with other people's money.

Your retirement fund is for just that - your retirement. Starting a company can be rewarding but it is also risky business. The good news is there are many new ways to raise capital. You don't have to go to venture capitalists or institutional funds to raise money. You can offer stock directly to your customers, users, salespeople, as well as the general public. Elenowitz comments on how social media exposure has benefited the startup process."Crowd investing through social media will transparently vet entrepreneurs, their opportunities and their community of contacts and colleagues."

Published on: Jan 25, 2016