• Tailor your investment strategy to your needsStock Market Crash image by Paul Heasman from Fotolia.com
  
  The stock market can be a good place to invest, but it is important to tailor your investing strategy to your individual needs and your tolerance for risk. Taking on more risk than you are comfortable with could mean you sell into a bear market, while choosing stocks that are too conservative could leave you with sub-par returns. The key is to find the proper balance between risk and reward.
  
  

Dollar Cost Averaging

• Dollar cost averaging is one of the best ways to make money in the stock market. With a dollar cost average approach you purchase the same dollar amount of shares month after month, regardless of what the market is doing. That automatically means you buy more shares when the market is going through a rough time and fewer shares when stocks are higher. This strategy works best with mutual funds--using it with individual stocks can be expensive if you must pay a commission every time.
  
  

Take Your Profits

• While it is a good idea to make exchange traded funds and mutual funds the cornerstone of your investing strategy, buying individual stocks from time to time can be both fun and rewarding. One way to increase your odds of making a profit is to set a mental limit for the stock when you buy it. Think about how much the stock has to rise before you would consider locking in your profits and selling part or all of your investors. Some investors will sell enough shares to make back their initial investments, keeping the remainder of the position for the possibility of further growth.
  
  

Be a Contrarian

• The motto of investing is "buy low, sell high," but many investors do just the opposite. After all, it is hard not to panic when the stock market has fallen 50 percent and your investments are now worth half of what they used to be. In reallity, these severe bear markets are often the best times to buy, and investors who are willing to buck the trend and go all in when the market his bottom are often handsomely rewarded when things begin to turn around. It is important for stock market investors to keep in mind that the market is a leading indicator, meaning that it typically begins to rise long before the economy starts showing signs of improvement.