Fidelity has observed six habits shared by successful investors over the years. Those habits are:

1. Developing a long-term plan, and sticking with it: Developing a plan to achieve your financial goals is the first and most important step. A Fidelity study found the most common change among 401(k) participants who reviewed their plan was a higher savings rate. The average savings rate increased from 6.9% to 12.1%.

2. Being super at saving: How much and how frequently you save has a direct and important impact on your financial future. Fidelity suggests workers should set aside an amount equal to at least 15% of income—including the employer match—each year into a 401(k) or an individual retirement account (IRA).

3. Not letting volatility distract from the plan: The best investors maintain an allocation to stocks they can live with no matter what the market is doing. For example, those investors who stayed allocated to stocks from the fourth quarter of 2008 through the end of 2015 saw their account balances grow 147% (factoring in both investment choices and contributions). Those who moved out of the stock market in the fourth quarter of 2008 or the first quarter of 2009 only realized 74% growth in their account balances.

4. Being diversified: Successful investors use diversification to smooth out the volatility of investing. Doing so allows them to stay allocated to stocks for longer periods of time.

5. Opt for low-cost investments: Another Fidelity study filtered large-cap funds by cost. Funds offered by the five largest fund families ranking in the bottom 25% of cost beat the market by 0.18 of a percentage point annually between 1992 and 2015. They also outperformed their peers by an average of 0.89 of a percentage point annually. The additional 0.89 of a percentage point results in $7,100 extra earned on $10,000 invested for 20 years.

6. Maximize aftertax returns: Successful investors focus not only on returns, but also on how much of those returns they will keep after taxes are factored in. Fidelity recommends paying attention to both account location and asset location. Account location is how much money is put into each type of account. Asset location is the type of account an asset is placed into.

Source: “Six Habits of Successful Investors,” Fidelity Viewpoints, December 7, 2016.

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